RELATES TO: KRS 216B.010, 216B.061, 216B.990
STATUTORY AUTHORITY: KRS 194A.030, 194A.050, 216B.040(2)(a)1, 216B.06(4)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 216B.040(2)(a)1 requires the Cabinet for Health and Family Services to administer Kentucky's Certificate of Need Program and to promulgate administrative regulations as necessary for the program. KRS 216B.061(4) requires the cabinet to establish the requirements for administrative escalations. This administrative regulation establishes the requirements for administrative escalation necessary for the orderly administration of the Certificate of Need Program.
Section 1. Definitions. (1) "Administrative escalation" means an approval from the cabinet to increase the capital expenditure authorized on a previously issued certificate of need.
(2) "Cabinet" is defined by KRS 216B.015(5).
Section 2. Administrative Escalations. (1) A person shall not obligate a capital expenditure in excess of the amount authorized by an existing certificate of need unless the person has received an administrative escalation or an additional certificate of need from the cabinet.
(2) Requests for administrative escalations shall be submitted to the cabinet on the OHP - Form 6, Cost Escalation Form, incorporated by reference in 900 KAR 6:055.
(3) The cabinet shall authorize administrative escalations for funds that have not been obligated and which do not exceed the following limits if there is not a substantial change in the project:
(a) $100,000, if the capital expenditure authorized on the certificate of need is less than $500,000;
(b) Twenty (20) percent of the capital expenditure if the capital expenditure authorized on the certificate of need is $500,0000 to $4,999,999;
(c) Ten (10) percent of the amount in excess of $5,000,000, plus $1,000,000, for projects if the capital expenditure authorized on the certificate of need is $5,000,000 to $24,999,999;
(d) Five (5) percent of the amount in excess of $25,000,000, plus $3,000,000, if the capital expenditure authorized on the certificate of need is $25,000,000 to $49,999,999; and
(e) Two (2) percent of the amount in excess of $50,000,000, plus $4,250,000, if the capital expenditure authorized on the certificate of need is $50,000,000 or more.
(4) If an administrative escalation is authorized, the certificate of need holder shall submit any additional certificate of need application fee required by the increased capital expenditure pursuant to 900 KAR 6:020.
(5) The escalation of a capital expenditure in excess of the limits set forth in subsection (3) of this section shall:
(a) Constitute a substantial change in a project; and
(b) Require a certificate of need pursuant to KRS 216B.061(1)(e).
(6) The unauthorized obligation of a capital expenditure in excess of the amount authorized on a certificate of need shall be:
(a) Presumed to be a willful violation of KRS Chapter 216B; and
(b) Subject to the penalties set forth at KRS 216B.990(2). (36 Ky.R. 248; Am. 814; eff. 10-21-2009.)