DCH Proposes Changes to Hospital Permit Regulation

The Georgia Department of Community Health (“DCH”) recently announced its intent to revise the Georgia regulations governing the hospital permit requirement, specifically Ga. Comp. R. & Regs 111-8-40-.03. The proposed rule can be viewed on DCH’s website.¹ Notable changes include an increase to the advanced notice to DCH required for a change of ownership or closure and the requirement that a new permit be obtained when a hospital merger occurs. Under the proposed rule, DCH will require 180 days prior written notice of the following:

• The addition or reduction of any services
• An asset sale (i.e., change of ownership)
• An anticipated closure

The 180-day advance notice requirement is a substantial change from the 30-day advance notice currently required for such actions. Failure to meet the notification deadline will lead to a $1,000 per day penalty, unless DCH waives or reduces the notification requirement for good cause.

In addition, the proposed rule requires a new hospital permit to be issued following the merger with another hospital. Under the current rule, a new hospital permit is only required if the hospital changes its location, name, ownership, classification, or capacity. The proposed rule also requires a hospital to submit a written request to DCH showing good cause to terminate its enrollment as a provider of medical assistance.

On March 9, 2023, the Board of Community Health will vote on the proposed rule.

For more information, please contact AGG Healthcare attorneys Jessica Grozine, Alex Foster, or Kadeja Watts.

The Arnall Golden Gregory CHOW team leads all regulatory aspects of healthcare transactions for investors, operators, managers, capital partners, and developers of every size in all 50 states. The team streamlines the regulatory process so that clients close their transactions on or ahead of schedule. Whether obtaining licensure and Medicare/Medicaid approvals, structuring transactions to expedite closings, anticipating issues to minimize cash flow disruption, negotiating regulatory terms in deal documents, creatively resolving diligence issues, or advising on CHOW guidelines and compliance, the team provides extensive experience and practical solutions. To date, the CHOW team has served as primary regulatory counsel in transactions valued at more than $35 billion.

[1] See https://dch.georgia.gov/document/document/amendment-hospital-permit-requirement-rules-111-8-40-03-initial-adoption-signed/download.