Lawmakers making last-ditch effort to reform certificate-of-need rules
Republican senators are making one last push to ease anti-competitive health-care laws before the legislative session ends.
A number of certificate-of-need reform laws have stalled in committees in both chambers. House and Senate budget negotiators failed to agree on including CON reform as a policy provision in the spending plan released Tuesday, June 25. But a new measure to lift CON restrictions on some health-care facilities surfaced Wednesday in the Senate Health Care Committee.
House Bill 126, originally an act to include tissue donation on a driver’s license donor authorization, was changed into a CON reform measure. It was brought up for discussion only. A vote is expected Thursday.
Critics say certificates of need issued by state bureaucrats protect existing providers. They keep health-care costs high because incumbent facilities lack competitive pressure. The CON process can be lengthy and expensive. It often involves litigation as newcomers battle entrenched interests wishing to keep them out of the market.
Sen. Mike Woodard, D-Durham, and other committee Democrats opposed backing off of CON laws. He worried competition could put legacy hospital and clinic providers out of business, especially in rural areas.
“North Carolina is the fourth most restrictive state on CON laws. We have to change them,” said Sen. Joyce Krawiec, R-Forsyth.
“I think it’s important for us all to realize that health care as it exists today must change,” Sen. Jim Perry, R-Wayne, said in supporting CON reform.
“The costs are out of control. It’s impossible to dump enough revenue on top of this situation with the explosive growth of costs to sustain it,” Perry said.
Under H.B. 126, kidney dialysis treatment centers and freestanding hemodialysis units wouldn’t need CON approval.
Intermediate care facilities for people with intellectual disabilities; psychiatric facilities; chemical dependency treatment facilities; and a continuing care retirement community establishing a home health agency to treat residents would be exempt from the rules.
The bill calls for a CON holder to forfeit it if construction doesn’t begin with four years for a project costing more than $50 million. That mandate drops to two years if the project costs less than $50 million.
Those changes would be effective Oct. 1.
Krawiec said ambulatory surgery centers were removed from the legislation. That’s the most controversial part of CON reform. Hospitals claim competing surgery clinics would deprive them of revenue needed to offset charitable care.
The legislation would allow single-surgery clinics with a certificate-of-need to transition into multi-surgery sites without a new CON. For example, a center doing knee replacements could be allowed to add hip replacements. But no new centers would be approved.
Leah Burns, a lobbyist with the N.C. Healthcare Association representing hospitals and large health systems, said the group opposes CON reform.
“Health care is under some unprecedented changes this upcoming year, Burns said.
She’s referring to Medicaid transformation and reimbursement model changes to the State Health Plan.
“We don’t know if the health-care infrastructure can handle any more changes.”
Krawiec thinks the concerns are unfounded. Other states have eliminated CON regulations without ill effect. She said CON reformers already rolled back the bill from a repeal of all CON rules, to a slimmed-down version, to the latest iteration that further eliminated ambulatory surgery centers.
State Employees Association of North Carolina spokeswoman Ardis Watkins said that organization supports CON repeal. The federal government already scrapped its CON regulations, she said. SEANC members lack accessibility and affordability in many health-care services, especially in rural areas, due to anti-competitive CON rules.
Sandy Sands, a lobbyist with Nexsen Pruett, which represents one of the state’s primary dialysis companies, said the CON process requires providers to treat everyone, regardless of economic, racial, ethnic, gender, or age considerations. He warned that broad patient mix could disappear without CON mandates.
Krawiec said that concern could be addressed. She would not object to mandating new services provide charity care, and accept Medicaid and Medicare payments.