33-2-704 - Cooperative agreements among community mental health centers Review by department Certificate of public advantage. - Tennessee Statutes

33-2-704. Cooperative agreements among community mental health centers Review by department Certificate of public advantage.

(a)  A community mental health center may negotiate and enter into cooperative agreements with other community mental health centers in the state if the likely benefits resulting from the agreements outweigh any disadvantages attributable to a reduction in competition that may result from the agreements.

(b)  Parties to a cooperative agreement may apply to the department for a certificate of public advantage governing that cooperative agreement. The application shall include an executed written copy of the cooperative agreement and describe the nature and scope of the cooperation in the agreement and any consideration passing to any party under the agreement. A copy of the application and copies of all additional related materials shall be submitted to the attorney general and reporter and to the department at the same time.

(c)  The department shall review the application in accordance with the standards set forth in subsection (e) and may hold a public hearing in accordance with the rules adopted by the department. The department shall give notice of the application to interested parties by publishing a notice in the state administrative register in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5. Any intervenor may intervene in the proceeding and shall have standing under the Uniform Administrative Procedures Act, compiled in title 4, chapter 5. The department shall grant or deny the application within sixty (60) days of the date of filing of the application, and that decision shall be in writing and set forth the basis for the decision. The department shall furnish a copy of the decision to the applicants, the attorney general and reporter, and any intervenor. Should the department determine that additional time is needed to review the application, the department, upon written notice to the applicants, the attorney general and reporter and any intervenor, may extend the time for review for a period of thirty (30) days except that, in the discretion of the commissioner, the period may be extended for an additional thirty (30) days.

(d)  If the cooperative agreement primarily relates to a program funded or administered by another department or agency of state government, the department may refer the application to that other department or agency to conduct the review and render the decision required by this part.

(e)  The department shall issue a certificate of public advantage for a cooperative agreement if it, or the other department or agency to which the department has referred the application pursuant to subsection (d), determines that the likely benefits resulting from the agreement outweigh any disadvantages attributable to a reduction in competition that may result from the agreement.

(f)  In evaluating the potential benefits of a cooperative agreement, the department may consider whether one (1) or more of the following benefits may result from the cooperative agreement:

     (1)  Enhanced quality of mental health and mental health-related care provided to state citizens, especially those receiving the services under programs funded or administered by departments or agencies of state government;

     (2)  Preservation of community mental health facilities in geographical proximity to the communities traditionally served by those facilities;

     (3)  Gains in the cost-efficiency of services provided by the community mental health centers involved;

     (4)  Improvements in the utilization of mental health resources and equipment;

     (5)  Avoidance of duplication of mental health resources; and

     (6)  Enhanced efficiency of the administration of programs of state government to provide mental health services to citizens of this state.

(g)  The department's evaluation of any disadvantages attributable to any reduction in competition likely to result from the agreement may include, but need not be limited to, the following factors:

     (1)  The extent of any likely adverse impact on the ability of health maintenance organizations, preferred provider organizations, managed health care organizations or other health care payers to negotiate optimal payment and service arrangements with community mental health centers, or other health care providers;

     (2)  The extent of any reduction in competition among physicians, allied health professionals, other health care providers, or other persons furnishing goods or services to, or in competition with, community mental health centers that is likely to result directly or indirectly from the cooperative agreement;

     (3)  The extent of any likely adverse impact on persons with mental illness or serious emotional disturbance in the quality, availability and price of health care services; and

     (4)  The availability of arrangements that are less restrictive to competition and achieve the same benefits or a more favorable balance of benefits over disadvantages attributable to any reduction in competition likely to result from the agreement.

(h)  The department, or other department or agency to which the department has referred the application under subsection (d), shall consult with the attorney general and reporter regarding its evaluation of any potential reduction in competition resulting from a cooperative agreement. The attorney general and reporter may consult with the United States department of justice or the federal trade commission regarding its evaluation of any potential reduction in competition resulting from a cooperative agreement. Should the attorney general and reporter, after consultation with the department, determine that it is necessary to consult with the United States department of justice or the federal trade commission, or determines that further information is needed to review the application, the department, upon written notice to the applicant, attorney general and reporter, and any intervenor, may extend the time for approval or disapproval of an application an additional forty-five (45) days.

(i)  If the department, or the other department or agency to which the department has referred the application under subsection (d), determines that the likely benefits resulting from a certified agreement no longer outweigh any disadvantages attributable to any potential reduction in competition resulting from the agreement, the department, or the other department or agency to which the department has referred the application under subsection (d), may initiate contested case proceedings to terminate the certificate of public advantage in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.

(j)  The department shall maintain on file all cooperative agreements for which certificates of public advantage remain in effect. Any party to a cooperative agreement who terminates the agreement shall file a notice of termination.

(k)  The department, or the other department or agency to which the department has referred the application under subsection (d), shall review, on at least an annual basis, each certificate of public advantage it has granted under this part. The certificate shall be renewed if it is determined that the certificate continues to comply with the standards of subsection (e).

(l)  Prior to making an application for a certificate of public advantage, the parties may submit an initial filing at least forty-five (45) days prior to filing the application. The initial filing shall summarize the proposed cooperative agreement, describe the affected geographic market areas and those matters described in subsections (f) and (g). The department shall review the initial filing within thirty (30) days of receipt of the filing, informing the parties of any deficiencies along with a statement of specific remedial measures as to how the deficiencies could be corrected. A review of the initial filing by the department does not constitute approval of the final application.

[Acts 1998, ch. 1005, § 4; T.C.A., § 33-2-904; Acts 2000, ch. 947, § 1; 2001, ch. 349, §§ 3-8.]