Cancer hospital’s expansion bid thwarted again

Move to sidestep Legislature miffed lawmakers, hospital lobby

A controversial history

Georgia established its Certificate of Need program in 1979. Goals were to hold down costs by guarding against unnecessary duplication of services and allow for coordinated planning of new health care facilities.

But debate over CON has continued. In 2006, Georgia lawmakers created a commission to evaluate the program. Its final report noted sharp disagreement in a number of areas, with critics saying CON hampers competition.

Currently, some 35 other states still have similar laws. But last month, the Federal Trade Commission and the Department of Justice urged a Virginia group to reconsider whether that state’s laws best serve its citizens. North Carolina recently approved a law that some say will chip away at its certificate of need rules.

After two months of intense lobbying by rivals, the battle over a private cancer hospital’s bid to expand its Georgia patient base will shift back to what will likely be an unfriendly General Assembly.

Department of Community Health Commissioner Clyde Reese on Thursday tabled a rule change that would have allowed Cancer Treatment Centers of America to shed its in-state patient cap.

The agency's board had tentatively approved the rule change in September. In doing so, it reignited a decade-long war between Georgia's powerful hospitals and the national cancer treatment company, two opponents with huge stables of well-connected lobbyists and a track record of generous giving to elected officials.

Reese told board members that since the initial vote the agency received "overwhelming" opposition to the change — much of it from the state hospital lobby and key lawmakers miffed that the company went around the General Assembly to get rid of the cap.

“I think it became clear the issue and the argument and the discussion needs to occur in the General Assembly,” Reese said. “I decided not to ask the board to vote on something that was obviously overwhelmingly seen in the (health care) community in a negative light.”

Senate Health and Human Services Chairwoman Renee Unterman, R-Buford, said she doesn’t expect CTCA to have any more luck with the General Assembly when it convenes in January.

“I think we dealt with it this year,” Unterman said. “I don’t expect things will change.”

David Kent, the chief operating officer at CTCA’s Southeastern Regional Medical Center, said the agency’s decision resulted from the enormous influence of the state’s hospital lobby.

“The hospitals have spent a lot of money and a lot of energy and effort to limit competition and clearly that’s what they did here,” Kent said. “They’re enormously powerful, and they control the market.”

But hospital groups said CTCA focuses on treating patients with the highest-paying insurance, while offering little to uninsured patients and people on Medicaid that other Georgia hospitals treat every day.

“We got our message out,” said Monty Veazey, president of the Georgia Alliance of Community Hospitals.

In Georgia, state law requires hospitals to go through a stringent “Certificate of Need” process if they want to build or expand a hospital. That requirement is intended to control health care costs by preventing an oversupply of health-care facilities.

In 2008, the General Assembly approved a law that allowed Cancer Treatment Centers to open the Newnan facility without going through the same process. As a “destination cancer hospital,” however, CTCA is limited by law to 50 beds and it must attract at least 65 percent of its patients from out of state.

CTCA pushed the Legislature this year to lift its cap and out-of-state requirement, but its efforts failed. In July, the hospital petitioned DCH, seeking a change that would allow it to become a general acute care hospital without the Georgia patient limit. It also could apply to expand beyond 50 beds.

Kent said Georgia patients who want to get treatment at CTCA sometimes can’t be seen immediately because of the out-of-state patient requirement.

“It’s really too bad that people who deserve a choice may or may not have one now, based on those guys’ ability to protect their turf,” he said.

But Georgia’s hospitals say that CTCA doesn’t see everyone who wants to get care there.

“They’re a for-profit, out-of-state company that is looking after their bottom line,” Veazey said.

CTCA said it doesn’t yet know what its next step will be in its quest to expand and see more patients, but the hospitals that oppose it expect another battle.

“I don’t think it’s over by any means,” Veazey said. “I think they made a bad strategic move by trying to circumvent the Legislature. And there are legislators that are pretty upset about that.”

Among them is Unterman, who criticized the company’s tactics. She said that Cancer Treatment Centers has been running TV advertisements in metro Atlanta to influence public opinion.

Both sides have spent a lot of money influencing the political process.

CTCA executives helped organize a fundraiser for Gov. Nathan Deal in Newnan last fall during his re-election campaign. Deal collected $12,500 from Cancer Treatment executives Sept. 23 after attending a ribbon-cutting at their Southeastern Regional Medical Center.

Since its push to enter Georgia began in the mid-2000s, Cancer Treatment Centers and its employees have contributed almost $400,000 to state party political action committees and the campaigns of lawmakers and other state leaders.

The company is up against some deep-pocketed players. The Georgia Hospital Association and Georgia Alliance of Community Hospitals have contributed about $2 million to state lawmakers, candidates, state leaders and party political action committees over the past decade, according to disclosure reports reviewed by the AJC. Deal and his political action committee have collected more than $50,000 from the two groups.

The lobbying continued after the DCH board gave initial approval to the rule in September. One CTCA lobbyist reported taking DCH board member Mark Trail out for lunch Oct. 26, while another one dined with House Judiciary Chairman Wendall Willard, R-Sandy Springs, on Oct. 7 to talk about Certificate of Need legislation.

Meanwhile, Veazey’s hospital group spent about $1,800 on five legislators — including Unterman — attending an “education conference” in mid-October at The Ritz-Carlton Lodge, Reynolds Plantation.