Ohio House Bill 58 proposes to establish a “certificate of need” (CON) program for recovery housing residences in Ohio. This program would require individuals or entities seeking to establish, expand, or significantly alter recovery housing facilities to obtain approval from the Director of Mental Health and Addiction Services. The bill outlines definitions, reviewable activities, exemptions, application processes, review criteria, enforcement mechanisms (including civil penalties), and an appeal process. It also amends existing law regarding the annual inspection of recovery housing and creates a dedicated fund for these activities. The overarching theme is to increase oversight and potentially control the development and expansion of recovery housing in the state.
Main Themes and Important Ideas/Facts:
1. Establishment of a Certificate of Need Program:
- The core of the bill is the creation of a CON program specifically for “recovery housing residences.” A “certificate of need” is defined as “a written approval granted by the director of mental health and addiction services to an applicant to authorize conducting a reviewable activity.” (Sec. 5119.398(B))
- The director will administer this program, issue rulings on reviewability, review applications, and grant or deny certificates based on established criteria. (Sec. 5119.3910(A))
2. Definition of Recovery Housing and Service Areas:
- The bill defines key terms, including “applicant,” “certificate of need,” “service area,” “primary service area,” and “secondary service area.”
- “Primary service area” is typically the zip code of the residence and contiguous zip codes, from which “approximately seventy-five to eighty per cent of the residence’s residents originate or are expected to originate.” (Sec. 5119.398(D))
- “Secondary service area” includes other Ohio zip codes from which the remaining residents originate. (Sec. 5119.398(E))
3. Reviewable Activities:
- Specific activities related to recovery housing will require a CON. These “reviewable activities” include:
- Establishment of a new building.
- Replacement or acquisition of an existing building to be used as recovery housing.
- Renovations or additions exceeding $500,000 (excluding equipment, staffing, and operational costs).
- Increases in bed capacity.
- Relocation of beds between different physical buildings or sites.
- Failure to conduct a reviewable activity in substantial accordance with the approved application within five years of implementation. (Sec. 5119.399(A))
4. Non-Reviewable Activities (Exemptions):
- Several activities are explicitly excluded from the CON requirement, such as:
- Acquisition of computer hardware or software, telephone systems, and parking facilities.
- Corrections of safety violations.
- Continued operation of existing recovery housing established before the bill’s effective date (as long as no other reviewable activity occurs).
- Acquisition of existing buildings without a change in bed capacity.
- Mergers or corporate reorganizations without bed changes.
- Construction/renovation of bathrooms, laundry, dietary, HVAC, and administrative offices.
- Asbestos removal. (Sec. 5119.399(B))
5. Application Process and Fees:
- Applications must be submitted to the director on prescribed forms and include information required by future rules. (Sec. 5119.3911)
- A nonrefundable application fee is required, the amount depending on whether the project is based on a specific number of beds ($250 per bed) or another basis as determined by the director’s rules. (Sec. 5119.3911(A)-(B))
6. Review Criteria:
- The director will adopt rules establishing procedures and criteria for reviewing CON applications. These criteria must relate to the need for the activity and pertain to:
- Impact on cost and quality of recovery housing in the service area.
- Quality of services to be provided (personnel, support services, equipment, space, relations with other providers).
- Impact on availability and accessibility of services, particularly for underserved individuals.
- Short-term and long-term financial feasibility and cost-effectiveness.
- Advantages, disadvantages, and costs of alternatives.
- Impact on existing providers of similar services (utilization, market share, financial status).
- Historical performance of the applicant in complying with previous CONs and other regulatory requirements.
- Historical performance in providing cost-effective recovery housing.
- Special needs and circumstances of the applicant or the population to be served.
- Appropriateness of the zoning status of the proposed site. (Sec. 5119.3913(A)(1)(a)-(j))
- The review criteria will include a formula for determining each county’s need for recovery housing. (Sec. 5119.3913(A)(2))
7. Enforcement and Penalties:
- “No person shall carry out a reviewable activity unless a certificate of need for the activity has been granted…” (Sec. 5119.3912(A))
- The director can investigate potential violations and may conduct site visits. Resident confidentiality must be protected during investigations. (Sec. 5119.3912(B))
- The director will impose civil penalties for violations of the CON requirements, according to rules adopted under the bill. (Sec. 5119.3912(C))
8. Appeals Process:
- Applicants denied a CON, those disagreeing with reviewability rulings, certificate holders facing withdrawal or voidance of their certificate, and those penalized for violations can appeal to the director. (Sec. 5119.3914(A))
- Appeals to the director will follow Chapter 119 of the Revised Code (administrative procedure law), including an adjudication hearing. Decisions following this hearing can be further appealed to the tenth district court of appeals. (Sec. 5119.3914(B))
9. Recovery Housing Residence Fund:
- The bill creates a dedicated “recovery housing residence fund” in the state treasury.
- This fund will consist of CON application fees and penalties collected under the new program.
- The funds will be used by boards of alcohol, drug addiction, and mental health services to assist with the costs of annual inspections and complaint investigations of recovery housing residences (as outlined in the amended Section 5119.393). (Sec. 5119.3915)
10. Amendment to Existing Inspection Requirements:
- The bill amends Section 5119.393, specifying that “Each recovery housing residence shall be inspected annually by the board of alcohol, drug addiction, and mental health services with jurisdiction over the area where the residence is located.” (Sec. 5119.393(A)) This clarifies the responsibility for annual inspections.
Quotes Highlighting Key Aspects:
- Definition of Certificate of Need: “‘Certificate of need’ means a written approval granted by the director of mental health and addiction services to an applicant to authorize conducting a reviewable activity.” (Sec. 5119.398(B))
- Core Requirement: “No person shall carry out a reviewable activity unless a certificate of need for the activity has been granted under section 5119.3910 of the Revised Code.” (Sec. 5119.3912(A))
- Focus of Review Criteria: “The criteria for reviews of applications for certificates of need shall relate to the need for the reviewable activity…” (Sec. 5119.3913(A)(1))
- Purpose of the Dedicated Fund: “The fund shall be used by boards of alcohol, drug addiction, and mental health services to assist with the costs incurred in conducting the inspections and complaint investigations required by section 5119.393 of the Revised Code.” (Sec. 5119.3915)
Potential Implications:
- Increased regulatory burden and potential delays for the development and expansion of recovery housing.
- Greater state oversight and potential for controlling the distribution and type of recovery housing services.
- Potential for increased costs for providers due to application fees and compliance requirements.
- A more formalized process for addressing concerns and ensuring a degree of quality and need within the recovery housing sector.
- The dedicated fund could provide resources for local boards to enhance their oversight and inspection capabilities.
Further Considerations:
- The specific criteria for granting or denying certificates of need will be crucial and will be detailed in future rules adopted by the director.
- The formula for determining county-level need for recovery housing will significantly impact the approval process.
- The effectiveness of the program will depend on the clarity and efficiency of the rules and the capacity of the Department of Mental Health and Addiction Services to administer the program.
This briefing document provides an overview of the key provisions of Ohio House Bill 58 as introduced. Further analysis will be necessary as the bill progresses through the legislative process and as the Director of Mental Health and Addiction Services develops the associated rules.