Health care ‘certificate of need’ system up for scrutiny in Legislature

The certificate of need (CON) system governs how the health care industry functions in Georgia. It has been targeted annually by legislators proposing reforms to relax its rules.

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The certificate of need (CON) system governs how the health care industry functions in Georgia. It has been targeted annually by legislators proposing reforms to relax its rules.

It wouldn’t be a Georgia General Assembly session without a fierce debate about the state’s health care regulatory apparatus.

That system, known as certificate of need (CON), mostly governs how the health care industry functions in the state. It has been targeted annually by legislators proposing reforms to relax its rules. But these bills have been vigorously — and successfully — opposed by Georgia’s hospital industry.

House Bill 1547, breaking late in this year’s session, isn’t just any CON reform bill. It aims to repeal the whole system in 2025.

In a move that surprised health care experts, that legislation was approved Thursday by the House Special Committee on Access to Quality Healthcare.

Still, there’s very little time left for the bill to pass the House by Crossover Day, the deadline for a bill to be approved by at least one chamber in order to become law this year. Crossover Day is Tuesday, and the CON repeal bill would have to clear the House Rules Committee and then pass on the floor by that deadline.

The main sponsor, House Majority Whip Matt Hatchett (R-Dublin), called CON a “monopolistic’' system that favors large hospital systems and stifles competition, raising health care prices in the process.

“Large hospitals get larger and our small hospitals continue to struggle to survive,’’ he said. He referred to CON — with a word play on the law’s acronym — as “a con game gone awry.”

The CON process governs the construction and expansion of health care facilities and regulates what kinds of services they can offer. A provider must obtain a state certificate of need for any major project. Such laws were adopted by states decades ago to control health care spending. But more than a dozen states have repealed these regulatory set-ups, including recently Florida.

Under Hatchett’s bill, changes would be made to CON in the years before repeal occurred. These provisions include:

* Allowing physician-owned surgery centers that feature multiple specialties.

* Limiting the amount of cash reserves maintained by hospitals that are run by hospital authorities.

* Requiring those authorities to comply with open records laws.

* Allowing state assistance to people with mental illness who are uninsured.

The legislation would replace CON with a licensing system, maintaining the facilities’ indigent care requirement.

The bill drew a strong response from the hospital industry.

Monty Veazey, president of the Georgia Alliance of Community Hospitals, which represents nonprofit facilities, told lawmakers that CON repeal would have a “devastating effect on the health care delivery system in this state.’’

He said it would worsen the current shortages of health care workers in hospitals still reeling from the financial impact of the pandemic. “This bill comes at the worst time for us. Across the state, hospitals are losing millions of dollars.” Repeal could lead to the closure of rural hospitals, Veazey added.

Rep. Butch Parrish (R-Swainsboro), a pharmacist, said during the panel debate that he agrees that the General Assembly should take “a long hard look at CON.’’ He cited the years-long legal delays in getting a new hospital opened in Columbia County, in eastern Georgia. But Parrish added, “I don’t think the answer is to totally eliminate” the regulatory system.

Members of the committee bemoaned the annual CON tug-of-war in the Legislature.

Rep. Sharon Cooper, a Marietta Republican who chairs the House Health and Human Services Committee, voiced lawmakers’ frustration with the CON issue, and with the many hospital lobbyists who fight any changes. “I’m sick of it,’’ she said. Even minor CON changes, Cooper said, draw intense lobbying.

That lobbying work is expected to escalate in the days leading up to Crossover Day.

In other health care news, Gov. Brian Kemp announced Friday that he will award more than $217 million to hospitals, assisted living communities and personal care homes with 25 or more beds to help prevent and mitigate the spread and effects of COVID-19.

The grant funding to licensed hospitals totals $170 million — up to $950,000 per facility — and the funding for assisted living communities and personal care homes totals $47 million — up to $100,000 per facility. The funding comes from pandemic relief funding passed by Congress in the American Rescue Plan Act.

Andy Miller is editor of Georgia Health News.