The Vermont Statutes Online

Title 18: Health

Chapter 043: Licensing of Hospitals

• § 1901. Policy

  The purpose of this chapter is to provide for the development, establishment, and enforcement of standards for the construction, maintenance, and operation of hospitals, which, in the light of advancing knowledge, will promote safe and adequate treatment of persons in hospitals. (Amended 1963, No. 154, § 1.)

• § 1902. Definitions

  The following words and phrases, as used in this chapter, shall have the following meanings unless otherwise provided:

  (1) “Hospital” means a place devoted primarily to the maintenance and operation of diagnostic and therapeutic facilities for in-patient medical or surgical care of individuals who have an illness, disease, injury, or physical disability, or for obstetrics.

  (A) “General hospital” is a hospital of which not more than 50 percent of the total patient days during the year are customarily assignable to the following categories of cases: chronic, convalescent and rest, drug and alcoholic, epilepsy, developmental and psychiatric disabilities and mental conditions, and tuberculosis and that provides adequate and separate facilities and equipment for the performance of surgery and obstetrics, or either, and for diagnostic X-ray and laboratory services.

  (B) “Psychiatric hospital” means a hospital for the diagnosis and treatment of mental illness.

  (C) “Tuberculosis facility” means a hospital (excluding preventoria), or the separate tuberculosis unit of a general, psychiatric, or chronic disease hospital for the diagnosis and treatment of tuberculosis.

  (D) “Chronic disease facility” means a hospital, or the separate chronic disease unit of a general hospital, for the treatment of chronic illness, including the degenerative diseases. The term does not include facilities primarily for the care of individuals with mental conditions and psychiatric disabilities or tuberculosis, nursing homes, and institutions the primary purpose of which is domiciliary care.

  (E) “Maternity hospital” means a hospital that receives maternity patients exclusively, for care during pregnancy, during delivery, or within 10 days after delivery.

  (F) “Nonprofit hospital” means any hospital owned and operated by a corporation or association, no part of the net earnings of which is applied, or may lawfully be applied, to the benefit of any private shareholder or individual.

  (G) “Proprietary hospital” means any hospital operated for individual gain or reward.

  (H) “Psychiatric facility” means a type of psychiatric hospital, or separate unit of a general hospital, where patients may obtain diagnostic services and receive intensive treatment for mental illness and where only a minimum of continued treatment facilities will be afforded.

  (I) The provisions of this subdivision (1) do not apply to any of the following institutions:

  (i) nursing and convalescent homes, boarding homes, homes for the aged, nurseries, and institutions used primarily for domiciliary care;

  (ii) any hospital conducted, maintained, or operated by the U.S. government or a duly authorized agency thereof.

  (2) “Person” means any individual, firm, partnership, corporation, company, association, or joint stock association, and the legal successor thereof.

  (3) “Governmental unit” means a state, or political subdivision thereof, or any department, division, board, or other agency of any of the foregoing.

  (4) “Licensing agency” means the Department of Health. (Amended 1959, No. 329 (Adj. Sess.), § 27, eff. March 1, 1961; 1963, No. 154, § 2; 2003, No. 122 (Adj. Sess.), § 141d; 2013, No. 96 (Adj. Sess.), § 96; 2017, No. 113 (Adj. Sess.), § 65; 2023, No. 53, § 76, eff. June 8, 2023.)

• § 1903. License

  No person or governmental unit may establish, conduct, or maintain a hospital in this State without first obtaining a license in accordance with this chapter. (Amended 1963, No. 154, § 3; 2017, No. 113 (Adj. Sess.), § 66.)

• § 1904. Application, fee

  (a) An application for a license shall be made to the licensing agency upon forms provided by it and shall contain such information as the licensing agency reasonably requires. Each application for license shall be accompanied by a license fee.

  (b) Annual license fees.

  (1) Base fee of $7,667.00.

  (2) Per-bed fee of $25.00.

  (3) The base fee for applicants presenting evidence of current accreditation by the Joint Commission on Accreditation of Health Care Organizations shall be reduced by $2,750.00.

  (c) Fees collected under this section shall be credited to a special fund established and managed pursuant to 32 V.S.A. chapter 7, subchapter 5, and shall be available to the Department to offset the costs of providing those services. (Amended 1963, No. 154, § 4; 2003, No. 163 (Adj. Sess.), § 2; 2007, No. 76, § 14; 2009, No. 134 (Adj. Sess.), § 26.)

• § 1905. License requirements

  Upon receipt of an application for a license and the license fee, the licensing agency shall issue a license when it determines that the applicant and hospital facilities meet the following minimum standards:

  (1) All hospitals receiving federal aid in their construction and equipment costs shall comply with Title VI of the Public Health Service Act and with Public Health Service regulations, Part 53, and with Appendix A of same, as amended.

  (2) There shall be full compliance with safety and sanitary standards as required by State and local building and sanitary codes in order to ensure maximum safety to patients and the public.

  (3) All general hospitals shall provide adequate and separate facilities and equipment for the performance of surgery and obstetrics, or either, and for diagnostic X-ray and laboratory services.

  (4) Remodeling or expansion of any hospital subject to the provisions of this statute shall be approved by the licensing agency prior to starting of such remodeling or expansion, whether or not federal aid is to be requested for the additional projects.

  (5) All patients admitted to the hospital shall be under the care of a State registered and licensed practicing physician as defined by the laws of the State of Vermont. All hospitals shall use the uniform credentialing application form described in subsection 9408a(b) of this title.

  (6) The nursing service of the hospital shall be directed at all times by a registered professional nurse currently licensed to practice nursing in Vermont.

  (7) The care of maternity patients and newborns shall comply with such reasonable regulations as the licensing agency may establish and thereafter modify in the public interest.

  (8) Professional case records shall be compiled for all patients and signed by the attending physician. These records shall be kept on file for a minimum of 10 years.

  (9) Every hospital shall have an organized medical staff of not fewer than three members that shall meet as often annually as recommended by the Joint Commission on Accreditation of Hospitals.

  (10) All employees shall have a preemployment screening by a licensed physician, licensed physician assistant, or licensed advanced practice registered nurse who is acting within his or her scope of practice, or by a designee acting under the direction of one of these licensed health care professionals. This screening shall include medically indicated radiological, hematological, biochemical, immunological, or serological screenings to exclude the presence of a communicable disease prior to employment. These screenings may be repeated annually as a condition of employment and the results shall be made available, on request, to the licensing agency for review.

  (11) All employees shall have such additional examinations, tests, and immunization treatments as the licensing agency may determine to be necessary in the public interest.

  (12) Accounting records of all operating procedures shall be kept on a monthly basis and complete operating and financial statements shall be compiled at least once annually and kept on file for 20 years.

  (13) The hospital grounds and buildings shall be subject to inspection by the licensing agency and other legalized authorities at all times.

  (14) A license is not transferable or assignable and shall be issued only for the premises and persons named in the application.

  (15) The licensee shall file an annual report containing such information as the licensing agency may reasonably require; a copy of the hospital’s annual report to its governing board shall be provided to the licensing agency within 30 days after publication of this document.

  (16) All new construction involving hospitals and related buildings on hospital premises shall comply with standards of the State Fire Marshal and the Department of Health, whether or not federal aid under Title VI of the Public Health Service Act is received for such construction.

  (17) The Department of Health may, when circumstances warrant, issue a temporary license for such period or periods and subject to such conditions as the Department shall deem proper, subject to the limitation that such a temporary license shall not be issued for a total period of more than 36 months. Such circumstances shall include issues concerning indicators in the hospital’s community report that may result in the Department’s issuing a license conditioned upon corrective measures or a temporary license with conditions.

  (18) All hospitals shall submit to the licensing agency a plan for implementing the provisions of section 1852 of this title and a plan for handling patient complaints, which shall become effective upon approval by the licensing agency. Plans under this subdivision shall include:

  (A) the designation of a person or persons qualified as a patient representative;

  (B) a method by which each patient shall be made aware of the complaint procedure;

  (C) an appeals mechanism within the hospital itself;

  (D) a published time frame for processing and resolving complaints and appeals within the hospital, and notification that further appeals of the hospital’s resolution of complaints may be made to the licensing agency under chapter 43 of this title; and

  (E) periodic reporting to the licensing agency of the nature of complaints filed, and action taken.

  (19) All hospitals shall accept payment for compensation claims of uninsured crime victims paid for by the Victims Compensation Board established in 13 V.S.A. § 5352 at 70 percent of billed charges and shall not bill any balance to the uninsured crime victim.

  (20) All hospitals shall comply with the rules adopted by the Commissioner pursuant to section 1914 of this title. License applications shall certify compliance with the rules.

  (21) In conducting its reviews, the licensing agency shall evaluate the quality and financial indicators published by the Commissioner of Health under subsection 9405b(c) of this title.

  (22) All hospitals shall provide oral and written notices to each individual that the hospital places in observation status as required by section 1911a of this title. (Amended 1959, No. 329 (Adj. Sess.), § 27, eff. March 1, 1961; 1963, No. 154, § 5; 1981, No. 238 (Adj. Sess.), § 1; 1985, No. 163 (Adj. Sess.), § 2; 2005, No. 215 (Adj. Sess.), §§ 75a, 323; 2007, No. 27, §§ 2, 3; 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012; 2015, No. 23, § 44; 2015, No. 54, § 4, eff. Dec. 1, 2015; 2015, No. 97 (Adj. Sess.), § 49; 2015, No. 152 (Adj. Sess.), § 4; 2017, No. 113 (Adj. Sess.), § 67; 2017, No. 199 (Adj. Sess.), § 1, eff. May 30, 2018; 2023, No. 6, § 130, eff. July 1, 2023; 2023, No. 53, § 77, eff. June 8, 2023.)

• § 1906. Revocation of license; hearing

  The licensing agency, after notice and opportunity for hearing to the applicant or licensee, is authorized to deny, suspend, or revoke a license in any case in which it finds that there has been a substantial failure to comply with the requirements established under this chapter. Such notice shall be served by registered mail or by personal service setting forth the reasons for the proposed action and fixing a date not less than 60 days from the date of such mailing or service, at which the applicant or licensee shall be given opportunity for a hearing. After such hearing, or upon default of the applicant or licensee, the licensing agency shall file its findings of fact and conclusions of law. A copy of such findings and decision shall be sent by registered mail or served personally upon the applicant or licensee. The procedure governing hearings authorized by this section shall be in accordance with the usual and customary rules provided for such hearings.

• § 1907. Appeal

  Any applicant or licensee, or the State acting through the Attorney General, aggrieved by the decision of the licensing agency after a hearing, may, within 30 days after entry of the decision as provided in section 1906 of this title, appeal to the Superior Court wherein the appellant is located. The court may affirm, modify, or reverse the decision of the licensing agency and either the applicant or licensee or licensing agency or State may appeal to the Supreme Court for such further review as is provided by law. Pending final disposition of the matter, the status quo of the applicant or licensee shall be preserved, except as the court otherwise orders in the public interest. (Amended 1971, No. 185 (Adj. Sess.), § 185, eff. March 29, 1972; 1973, No. 193 (Adj. Sess.), § 3, eff. April 9, 1974.)

• § 1908. Rules; exceptions

  (a) The licensing agency shall adopt and enforce rules and standards with respect to the different types of hospitals to be licensed under this chapter as may be designed to further the accomplishment of the purposes set forth in this chapter; such rules and standards shall be modified, amended, or rescinded from time to time by the licensing agency as may be in the public interest.

  (b) No such rules and standards shall be adopted or enforced that would have the effect of denying a license to a hospital solely by reason of the school or system of practice employed or permitted to be employed by physicians therein, provided that such school or system of practice is recognized by the laws of the State. Provided, however, that no rule or requirement shall be made under this chapter for any hospital conducted for those who rely upon treatment by spiritual means or prayer in accordance with the creed or tenets of any recognized church or religious denomination, except as to the sanitary and safe condition of the premises, cleanliness of operation, and its physical equipment. (Amended 2015, No. 23, § 106; 2023, No. 6, § 131, eff. July 1, 2023.)

• § 1909. Inspections

  The licensing agency shall make or cause to be made such inspections and investigations as it deems necessary. If the licensing agency finds a violation as the result of an inspection or investigation, the licensing agency shall post a report on the licensing agency’s website summarizing the violation and any corrective action required. (Amended 2019, No. 55, § 2.)

• § 1910. Records

  (a) Information received by the licensing agency through filed reports, inspection, or as otherwise authorized by law shall:

  (1) not be disclosed publicly in a manner that identifies or may lead to the identification of one or more individuals or hospitals;

  (2) be exempt from public inspection and copying under the Public Records Act; and

  (3) be kept confidential except as it relates to a proceeding regarding licensure of a hospital.

  (b) The provisions of subsection (a) of this section shall not apply to the summary reports of violations required to be posted on the licensing agency’s website pursuant to section 1909 of this chapter. (Amended 2019, No. 55, § 3.)

• § 1911. Construction

  This chapter shall not be construed in any way to restrict or modify any law pertaining to the placement and adoption of children or the care of unmarried mothers.

• § 1911a. Notice of hospital observation status

  (a)(1) Each hospital shall provide oral and written notice to each Medicare beneficiary that the hospital places in observation status as soon as possible but not later than 24 hours following such placement, unless the individual is discharged or leaves the hospital before the 24-hour period expires. The written notice shall be a uniform form developed by the Department of Health, in consultation with interested stakeholders, for use in all hospitals.

  (2) If a patient is admitted to the hospital as an inpatient before the notice of observation has been provided, and under Medicare rules the observation services may be billed as part of the inpatient stay, the hospital shall not be required to provide notice of observation status.

  (b) Each oral and written notice shall include:

  (1) a statement that the individual is under observation as an outpatient and is not admitted to the hospital as an inpatient;

  (2) a statement that observation status may affect the individual’s Medicare coverage for hospital services, including medications and pharmaceutical supplies, and for rehabilitative or skilled nursing services at a skilled nursing facility if needed upon discharge from the hospital; and

  (3) a statement that the individual may contact the Office of the Health Care Advocate or the Vermont State Health Insurance Assistance Program to understand better the implications of placement in observation status.

  (c) Each written notice shall include the name and title of the hospital representative who gave oral notice; the date and time oral and written notice were provided; the means by which written notice was provided, if not provided in person; and contact information for the Office of the Health Care Advocate and the Vermont State Health Insurance Assistance Program.

  (d) Oral and written notice shall be provided in a manner that is understandable by the individual placed in observation status or by his or her representative or legal guardian.

  (e) The hospital representative who provided the written notice shall request a signature and date from the individual or, if applicable, his or her representative or legal guardian, to verify receipt of the notice. If a signature and date were not obtained, the hospital representative shall document the reason. (Added 2015, No. 54, § 5, eff. Dec. 1, 2015; amended 2023, No. 6, § 132, eff. July 1, 2023.)