News: Quick Takes

CON reforms may be rolled into proposed special health-care session

Certificate of Need reform could join the other health-care issues that are ensnared in the fight over the budget veto override and Medicaid expansion. 

House Bill 126 would have loosened CON laws, which require health providers to apply to the government for permission before building, expanding, or buying expensive medical equipment.

The bill had passed the Senate, 24-18, but the House failed to concur Monday, Aug. 19. The bill now heads to a conference committee chaired on the House side by Rep. Linda Johnson, R-Cabarrus. Failing movement on H.B. 126, CON reform may wait for a proposed special legislative session devoted to health care. 

Although bills from the regular session couldn’t carry over into a special session, lawmakers could take up the reform in a new bill. This would bind the push for reform to the fate of the veto override, essentially locking CON reform in the stalemate over Medicaid expansion. 

“The special session as proposed in the budget would be dedicated to all things health care, including CON reform, Medicaid expansion, and any other ideas that would improve access to health care in the state,” Bill D’Elia, spokesman for Senate leader Phil Berger, R-Rockingham, said in an email. 

H.B. 126 was this session’s latest iteration of CON reform. It was a watered-down version of earlier, more contentious reforms that loosened regulations on ambulatory surgery centers. 

“We have been working on meaningful CON reform for most of this session and we look forward to working together with the House on a conference report that continues those efforts,” Sen. Joyce Krawiec, R-Forsyth, said in a statement. “Reforming these outdated, overly restrictive regulations is vital to expanding access and reducing the cost of health care in North Carolina.”

Legislators have pushed CON reform for years. The federal government rolled back CON law requirements in the 1980s, and the Federal Trade Commission and the Antitrust Division of the Department of Justice have long blasted them for restricting competition.  

“Incumbents may exacerbate the competitive harm from these entry barriers by taking advantage of the CON process — and not merely its outcome — to protect their revenues,” a USDOJ report reads. “It can divert scarce resources away from health care innovation as potential entrants incur legal, consulting, and lobbying expenses responding to competitor challenges.”
Fifteen states have lifted CON requirements, but North Carolina boasts some of the nation’s tightest requirements. Supporters — led by hospitals — credit CON laws with protecting rural or vulnerable providers. Critics blast them for restricting access to health care

The bill would have allowed facilities to spend $2 million on a piece of equipment without needing to get CON permission — adjusting thresholds for inflation that haven’t moved since 1993. 

It would also have excluded psychiatric facilities, chemical dependency treatment facilities, and certain continuing care facilities, among others, from CON requirements.