Kemp threatens ‘executive action’ if hospital deregulation push stalls

Gov. Brian Kemp on Wednesday threatened "executive action" if the General Assembly does not pass legislation to free up competition for hospitals.

Kemp, for the first time, backed the most sweeping of the proposals that legislators have suggested on the subject, called certificate of need, or CON, saying the version proposed by a special House committee earlier this year must be made law.

“I applaud the House Rural Development Council’s hard work over the past several months,” Kemp said in a statement to The Atlanta Journal-Constitution. “If the legislature does not adopt their common sense reforms, I will explore executive action to put patients — not the status quo — first.”

That proposal would virtually eliminate CON within the Atlanta region and significantly weaken it in the rest of the state.

CON is meant to protect the bottom line of nonprofit hospitals, which are mandated to provide care to patients whether or not they can pay. Hospitals fear that if given free rein, health care businesses would pop up to cherry-pick their few profitable services, such as outpatient surgery, and leave them with the money-losers.

Under the current CON system, a health care business that wants to start up or expand must obtain a certificate from the state saying the new service is needed.

Health care entrepreneurs say the CON regulation prevents good businesses from opening, hurts creativity and innovation, and deprives patients of choices.

In staking out his stance, Kemp said he was “committed to pursuing free-market solutions that lower healthcare costs, eliminate barriers to access, and improve quality of care in every region of our state.”

Hospitals have countered that health care is not a free market. They are asked to provide services that private businesses are not. And they are required by law to treat patients who can’t pay in much greater numbers than private businesses are.

Hospital groups fought hard against the House Rural Development Council’s proposals. The Georgia Hospital Association said CON “ensures access to care for all Georgia patients, especially the uninsured, underinsured and rural communities.”

It was unclear exactly what executive action Kemp could take. CON requirements are written in law. However, it is the Department of Community Health, under the executive branch, that decides whether to issue the certificates. There are rules and regulations that officials may try to maneuver around.

In addition, Kemp’s administration could pursue the priorities and legislative initiatives of critics of the CON legislation.

Several bills to ease CON rules died in the House and Senate on Crossover Day, each failing to attract enough votes to pass a chamber by the legislative deadline. But lawmakers can still insert the language they want in other bills that did pass a chamber and see if they can find the votes to pass the new version.

One such effort appeared in the Senate Finance Committee without warning Wednesday afternoon, amended to House Bill 186. But it would not come close to the broad changes Kemp is seeking.

HB 186 as it’s now written would free the Cancer Treatment Centers of America from restrictions over how many in-state patients it is allowed to treat, and allow it to increase the number of its beds like other hospitals do. It would not unleash the profusion of multispecialty outpatient surgery centers that hospitals fear. It passed the committee. Unlike the changes Kemp is calling for, the Georgia Hospital Association supports HB 186.

State Rep. Matt Hatchett, R-Dublin, had sponsored a CON bill that attempted to make the extensive changes Kemp advocated. That bill died in the House, but Hatchett vowed to continue looking for ways to revive it. He said of the new HB 186, "there's some pieces to that I like," and he wouldn't rule out reviving his own legislation. "Nothing's dead til Sine Die," the last day of the session, he said.

Bills have until April 2 to pass the General Assembly this year.

KEMP’S STATEMENT

“As Governor, I am committed to pursuing free-market solutions that lower healthcare costs, eliminate barriers to access, and improve quality of care in every region of our state. To reach these goals, I firmly believe that we need meaningful reform of Georgia’s certificate of need laws and regulations. We must be bold. The time is now.

“I applaud the House Rural Development Council’s hard work over the past several months. If the legislature does not adopt their common sense reforms, I will explore executive action to put patients — not the status quo — first.”

WHY IT MATTERS

Currently, a health care business that wants to open or expand in Georgia needs to obtain a certificate of need from the state saying the new service is needed. It’s meant to protect nonprofit hospitals by preventing health care businesses from cherry-picking the hospitals’ few profitable services and leaving them with the money-losers. But entrepreneurs say the certificate system deters creativity and innovation, and deprives patients of choices.

Stay on top of what’s happening in Georgia government and politics at ajc.com/news/georgia-government/.