In the first major change in a decade to Georgia’s laws that protect nonprofit hospitals from competition, the Legislature on Friday agreed to free the private hospital company Cancer Treatment Centers of America from special restrictions on its Georgia business growth.
The law, called certificate of need, or CON, is meant to protect nonprofit hospitals' bottom lines from competition by private facilities. Nonprofit hospitals say they are at a disadvantage because they are required to treat all patients who walk in the door, even if they don't have insurance, and even if they need services that cost money to treat. The nonprofit hospitals say that private health care businesses want to cherry-pick their few profitable services, such as outpatient surgery and cancer treatment, and leave them with the money-losers, such as extended neonatal care.
Private health care entrepreneurs say that CON restrictions stop them from innovating and from providing choices to Georgia patients.
The CON change Friday is "a milestone moment for Georgians and access to the cancer care they want and need," said Ray Williams, a lobbyist for CTCA. The bill now goes to Gov. Brian Kemp's desk for his signature.
CON requires any health care facility that wants to set up shop or to expand to request the state’s certification that the new service is needed by the community.
When CTCA wanted to come to Georgia, it struck an agreement in 2008 saying that it would take no more than 35 percent of it patients from Georgia, thus limiting its competition with other major Georgia hospitals that treat cancer. It also agreed it would not be able to expand its beds under the CON law.
Shortly after the facility opened and filled up, it began fighting those restrictions.
House Bill 186, pushed by state Rep. Matt Hatchett, R-Dublin, would erase those restrictions. If signed by the governor, it will allow CTCA to take as many patients from Georgia as the hospital has space to accommodate them. And it will now be able to expand under CON laws just as any other hospital can expand.
A lobbyist for the Georgia Hospital Association, Ethan James, said the association was “happy to put the CTCA controversy behind us” after fighting CON changes for years. He urged Kemp to sign the bill into law.
A spokesman for Piedmont Healthcare, Matt Gove, concurred. “I think we always had the most direct interest in CTCA because of our hospital in Newnan,” where CTCA is also located, Gove said. Piedmont is glad CTCA will now be pulled under the same general CON rules as other hospitals, Gove said.
HB 186 passed the House by a vote of 170-3. In agreeing on the bill, the Georgia Hospital Association calculated that the greater threat to most of its members was outpatient surgery centers. It will continue to fight legalizing multispecialty outpatient surgery centers.
Hatchett, speaking to reporters outside the House chamber, said that “I think we’ve taken a huge step in modernizing health care today.”
A separate bill that would require nonprofit hospitals — but not for-profit ones — to post detailed financial information online, House Bill 321, also passed. If it is signed by Kemp, nonprofit hospitals will have to post audited financial statements online, as well as the compensation packages for their 10 top paid administrators, and the location and price of land they own.
That bill also includes approximately $1 billion worth of funding for hospitals that treat large numbers of Medicaid patients.
The road to scaling back CON has been long and difficult. Opponents of CON have been among the Legislature’s biggest spenders and most pressing lobbyists. Legislative leaders this year were fed up with the battle and eager to at least chip away at CON.
Study committees in both the House and Senate began the session with bills that went further than HB 186 and HB 321 do.
The fight put big cracks in the unity of the hospital association. At one point Piedmont broke away to make its own suggestion on scaling back CON, to allow a big outpatient medicine business that wouldn't impinge on the territory of Piedmont as much as it would hospitals' such as Northside Hospital.
Whether those fights are over is an open question. As Hatchett accepted congratulations from his fellow representatives after the vote and took a thumbs-up from House Speaker Pro Tem Jan Jones, he told reporters, "It's my opinion I would like to see CON eliminated."
READ IN DEPTH: Gov. Kemp presses for hospital law change
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.
About the Author
