Health; Certificate of Need

Subject:

Health; Certificate of Need.

Requested By:

Sarah T. Morrow, M.D., M.P.H., Secretary Department of Human Resources

Question:

Does Chapter 1127, section 31 of the 1981 Session Laws prohibit the issuance of a certificate of need for the construction of nursing home beds at one site when a like number of beds is closed at another site?

Conclusion:

Yes.

The factual background set forth in your request for opinion, dated 1 June 1982, is repeated below to clearly indicate the assumptions upon which this opinion is based.

A county owns a nursing home that it has operated in the past; however, for some time the home has been operated by a private corporation which has leased the facility from the county. The corporation has closed a number of the nursing home beds. The county wishes to construct a like number of nursing home beds on the site of the county hospital.

Your request for an opinion acknowledges that the county would be required to obtain a certificate of need under G.S. 131-178 before constructing the beds. The question posed is whether chapter 1127, Section 31, 1981 Session Laws prohibits the issuance of a certificate of need.

Section 31 reads, in what is deemed to be pertinent part, as follows:

(b) No certificate of need shall be granted after January 1, 1982, . . . for any additional bed capacity or any new bed capacity for any skilled nursing facility, proposed skilled nursing facility, intermediate care facility, or proposed intermediate care facility (as defined in G.S. 131176), until all skilled nursing facility bed capacity authorized by any certificate of need or authorized under Section 1122 of the Social Security Act (42 U.S.C. § 1320a-1.) has been constructed subsequent to the effective date of this section are at seventy-five percent (75%) occupancy.

Until the conditions of a statute are met, the statute clearly prohibits issuance of a certificate of need for either of the following:

(1)

the addition of beds to an existing skilled nursing facility or existing intermediate care facility; and

(2)

the establishment of new beds in a new skilled nursing facility or new intermediate care facility.

In the request for an opinion, you have asked if beds may be transferred from one site to another. The statute does not contain an exemption for transfers. Therefore, if the transfer would add beds to an existing facility or establish new beds at a new facility, the prohibition would apply.

Since the request for opinion states that the beds would be built at the county hospital, the request raises one final issue: does the statute in question cover skilled nursing and intermediate care beds which are operated by a hospital. In our opinion it does. This conclusion is based on the fact that the contrary conclusion would result in a situation plainly at odds with the intent of the General Assembly. If an entity is a skilled nursing facility only if it offers nothing but skilled nursing services and if an entity is an intermediate care facility only if it offers nothing but intermediate care services, then a nursing home that offers both, which we understand is common practice, would not fall within the certificate of need definitions of skilled nursing homes offering both levels of nursing care would not be subject to certificate of need, a result plainly at odds with intent of the General Assembly. Since it is clear that the General Assembly intended that an institution may contain more than one type of health care facility, the fact that the beds in question may be operated by a hospital does not change the result.

In conclusion, we conclude that section 31 of Chapter 1127 of the 1981 Session Laws, prohibits the issuance of a certificate of need under the circumstances set forth herein.

Rufus L. Edmisten Attorney General

Robert L. Hillman Assistant Attorney General