Bed need shall be evaluated consistent with the below standards, methodology, and principles:

1. (1)

   1. (a) Determine the estimated population for the Health Service Area identified in OAR 333-615-0010(4) for the prior 10 years in five-year increments, and five- and 10-year forecasts as a basis for estimating the population for previous years and forecasting future years. Applicants may use Portland State University's (PSU) Population Research Center (PRC) Intercensal Estimate reports, and when available, United States Census Data. When an Area Trauma Advisory Board (ATAB) includes ZIP code inclusions or exclusions, applicants shall apportion estimates to ATAB ZIP codes. The apportionment method shall be provided and shall include reproducible tabulations. If the applicant uses an alternate data source for population estimates, the applicant must provide justification for the alternate data source and evidence demonstrating it is consistent with generally accepted demographic estimation standards and has comparable reliability to official sources.
   2. (b) Age and sex specific forecasts and changes over time in the age and sex composition of the Health Service Area population shall be examined, and the implications for use-rates taken into consideration.
   3. (c) For purposes of calculating use rates and projecting bed need, applicants shall include all inpatient episodes meeting the definitions of psychiatric admission or psychiatric discharge, using discharge data grouped by psychiatric DRGs and ICD–10 codes. Episodes with dual diagnosis shall be reported separately and incorporated into utilization projections. Acceptable data sources shall include All Payer All Claims (APAC), Medicare Cost Reports, and data sets consistent with this rule.

   4. (d) If an applicant relies on proprietary hospital data sources not contained within APAC or Medicare Cost Reports, then the applicant must also provide:

      1. (A) A detailed methodology explaining data collection, case definitions, exclusions, and any adjustments made.

      2. (B) A third-party certification, stating that:

         1. (i) The proprietary data are complete, accurate, and unbiased.
         2. (ii) The methodology aligns with statutory definitions of psychiatric inpatient care and is consistent with APAC standards.
         3. (iii) Evidence that the certification was conducted by an independent auditor with relevant expertise in discharge data or health care utilization statistics.
         4. (iv) Applicants must provide the proprietary dataset in a de-identified format sufficient to replicate utilization rate calculations.
2. (2) Determine current year proposed Health Service Area and historical Health Service Area population-based discharge and patient day use-rates utilizing relevant and recent data. Future use-rate deviations must be explained.
3. (3) Determine current year and historical utilization by Health Service Area population of existing facilities. For the current year, and each of the prior 10 years, the applicant shall explain factors which may have affected identified trends. Factors to be addressed include, but are not limited to, changes in: population, public health needs (including any public health emergency), hospital location, service mix, age mix, reimbursement mix, transportation patterns, locations of physicians, specialists, unmet need, availability of alternatives, and the intensity or types of services delivered;

4. (4) Estimate future utilization rates by the Health Service Area population, based on population forecasts for age and sex breakdowns, including consideration of an explained range of age and sex adjusted use-rates specific to:

   1. (a) The Health Service Area;
   2. (b) The nearest facilities with service mixes most comparable to the proposed facility; and
   3. (c) The nearest facilities with comprehensive service mixes.
5. (5) Evaluate the age range and payer implications tied to Medicaid eligibility, including analysis of the federal Institution for Mental Diseases (IMD) exclusion for individuals ages 21 through 64 as applicable. The applicant shall document how the proposed capacity will serve Medicaid-eligible individuals, identify alternative funding strategies for non-covered stays, and explain the impact on projected utilization and financial feasibility on the applicant and alternatives.
6. (6) Evaluate a patient migration adjustment factor that quantifies in-migration and out-migration for the Health Service Area. The factor shall include the in-migration rate, out-migration rate, and a net migration index. Applicants shall present reproducible tabulations based on patient origin and site of service.
7. (7) Develop a consistent and reasonable set of well-documented assumptions regarding the appropriate use-rates reviewed in this rule, including the extent to which utilization at the proposed psychiatric hospital will be new and the extent to which it will replace existing utilization at hospitals.
8. (8) Analyze the advantages and disadvantages of both new and replacement components of utilization, with respect to both the population to be served and to existing facilities and alternatives. Address the legislative findings cited in ORS 442.310.
9. (9) Given all information from the preceding steps, and five and 10-year population forecasts, compute the range of possible future patient days in five- years and in 10- years at the new psychiatric hospital, allowing appropriate adjustments for out-of-area utilization and other identified and justified special factors or considerations relevant to the proposal.
10. (10) Convert each computed value of forecasted patient days based on preceding sections of this rule to an average daily census (ADC).
11. (11) Estimate the statistically expected peak daily census, the statistical variability, or standard deviation, of the daily census and provide the methodology used by the applicant and sufficient information to validate use of the applicant’s statistical model.
12. (12) Using a 10-year projection from the anticipated opening date of the new hospital, the applicant shall identify supported mathematical estimates of appropriate utilization levels and patient days generated because of changes identified in prior steps. The applicant shall explain the degree to which the utilization will be "new" days for the health service area population or will shift present health service area utilization patterns for the services. The applicant shall address whether this analysis supports the need for the proposed hospital.
13. (13) If the result of the above analysis indicates that psychiatric inpatient beds are needed in the proposed Health Service Area, an applicant for a new hospital shall weigh it against the availability of beds at other facilities and the availability of alternatives within the Health Service Area. Applicants shall use inpatient psychiatric bed capacity for all facilities in the Health Service Area as provided by the Oregon Health Authority. Conversion of existing beds to psychiatric inpatient beds will be presumed infeasible where a general acute inpatient hospital in the proposed Health Service Area has not increased their psychiatric inpatient bed capacity by 20 percent or greater over the prior three-year interval from the date the applicant submitted their letter of intent.

14. (14)

    1. (a) Applicants must document how the project will avoid adverse financial impact to existing psychiatric service providers and alternatives, particularly those serving high-acuity or underserved populations. The analysis shall address whether the proposed project will contribute to continuity or conversely, fragmentation of psychiatric care in the Health Service Area.
    2. (b) For a proposed freestanding psychiatric hospital this shall include a transfer agreement, which must include reason for transfer, medical records and a medication list along with a commitment to take the patient back as soon as they are medically cleared.

Statutory/Other Authority

ORS 431.120 & ORS 442.315

Statutes/Other Implemented

ORS 431.120 & ORS 442.315

History

PH 19-2026, amend filed 04/17/2026, effective 04/17/2026
PH 20-2025, temporary amend filed 10/22/2025, effective 10/22/2025 through 04/19/2026
HD 13-1994, f. & cert. ef. 4-22-94