Calvin Lane prepares medications for patients at Wayne Memorial Hospital in Jesup, near the Georgia coast. The hospital treats patients in a multicounty area, and with 500 workers, it is easily one of the area’s largest employers. The legislative session about to begin has big financial implications for hospitals such as Wayne Memorial and across Georgia. PHOTO by HYOSUB SHIN / HSHIN@AJC.COM

Health care could have ‘big year’ in Georgia’s Legislature

The hospital Joe Ierardi runs near the Georgia coast is hundreds of miles from the state Capitol in Atlanta. But that’s where make-or-break decisions for the Wayne County facility and other hospitals across the state may be made over the next three months, he believes.

The flow of hundreds of millions of health care dollars through Georgia could be routed one way or another, depending on what the General Assembly does on two issues in state law that have long percolated and now are on the front burner. One is whether to lift a statewide hospital regulation, and the other involves insurance for those who can’t afford it.

And no one has more at stake than Georgia’s hospitals serving the poor and vulnerable, and their surrounding communities, especially those in rural areas.

“Our hospital employs about 500 folks,” easily one of the largest employers in the area, Ierardi said. “We don’t just serve our county, we also serve contiguous communities,” regardless of ability to pay.

Depending on what the Legislature decides, a change in law could be a boon or “absolutely” have the potential to send the hospital into the red, he said.

“It’s going to be real interesting.”

Momentum building

Advocates for years have sparred about Certificate of Need, or CON, a state regulation meant to protect hospitals’ bottom lines. Business such as Cancer Treatment Centers of America and entrepreneurial doctors who want more profits from outpatient surgery have spent years pushing to revisit the law. This year the effort’s got momentum.

“I think it’s been suppressed for a long time, and I think legislators are just sick and tired of dealing with it,” said state Sen. Renee Unterman, a Republican from Buford and chairwoman of the Senate Health and Human Services Committee.

CON says that if someone wants to open or expand certain health care facilities, the state must certify that there’s really a need for the new service. The idea is to keep for-profit businesses from cherry-picking the moneymaking services that hospitals offer (such as outpatient bone surgery) and leaving the hospitals with the money losers (such as neonatal care).

Hospitals want to keep CON.

“The stakes are whether we live or die,” said Monty Veazey, a lobbyist for rural hospitals, noting the half-dozen rural Georgia hospitals that have closed in the past decade.

Skeptics say CON stifles innovation and consumer choice. They add that the hospitals’ concern is out of proportion.

“There’s really no evidence it accomplishes what it meant to accomplish, which is keeping costs down and ensuring access for people,” said Kyle Wingfield, the CEO of the libertarian-leaning Georgia Public Policy Foundation. And the Legislature has supported charity care requirements for those businesses in its CON proposals, he noted. “The fear that lifting it will take the paying customers and leave us with the nonpaying seems to be addressed,” he said.

Each chamber of the Legislature spent recent months studying CON. The Senate committee was led by state Sen. Ben Watson, R-Savannah, a physician whose personal business could benefit from lifting CON by allowing him and his partners to open a new center, and he has drafted legislation. The House committee was the Rural Development Council, led by state Rep. Terry England, a Republican from Auburn and chairman of the chamber’s powerful Appropriations Committee. The council proposed virtually wiping out CON in the Atlanta region and weakening it in the rest of the state. It also included a minimum charity care requirement. House Speaker David Ralston on Tuesday appointed a new committee with high-powered leadership to craft the resulting legislation this session.

Back at Wayne Memorial Hospital, Ierardi paid close attention.

“It was definitely eye-opening what came out of that report,” he said of the House proposals.

“The one thing that worries us the most is ambulatory (outpatient) surgery centers that just pop up,” Ierardi said. A small single-specialty outpatient surgery center opened up in town and the hospital’s revenue fell like clockwork, he said.

“A multispecialty (outpatient) surgery center, if it were just to pop up in town, that could take a lot of our business away from us,” he said. “We take all comers regardless of your ability to pay, we’re proud to do that. But when you start taking some of your business away, it dilutes that market and can make it even tougher to provide services on a daily basis.”

Ierardi said he is optimistic that if CON has to be changed, it’ll be done in a way that’s not harmful to institutions such as his.

State Rep. Sharon Cooper, a Republican from Marietta and chairwoman of the House Health and Human Resources Committee, echoed his thoughts, counseling patience as the Legislature does its due diligence over the session in crafting law. “It’s a process,” she said. “Of people giving input. And people being heard. And finding compromises.”

Other issues

Observers raise several other issues that might surface in the upcoming session. They include surprise billing, where insured patients get stuck with their own hospital bills; the opioid crisis; in-state cultivation and distribution of medical marijuana; and vaping’s harm to young users. And hospital lobbyists say they appreciate the House council’s proposal to increase allowed tax-free donations to hospitals.

One of the biggest ideas on the table? A “waiver” to make it easier to provide insurance coverage for those who can’t afford it. That will depend on what the incoming governor wants to do. It’s a question of vital importance to hospitals, which are required by law to see people who come to the emergency room whether or not they can pay.

The waiver issue comes out of the discussion over expanding Medicaid to insure Georgia’s poor childless working-age adults, who are currently not eligible for the state-federal public health program for the poor. Gov.-elect Brian Kemp in his campaign opposed expanding Medicaid.

However, the state can ask the federal government to waive certain rules of Medicaid in order to craft a program that state leaders are more comfortable with — for example, one that requires recipients to work to receive benefits. Kemp’s health care adviser, former U.S. Health and Human Services Secretary Tom Price, recently said that Georgia needs to grasp the possibility offered by Medicaid and Affordable Care Act waivers. “I think Georgia can be a leader. I think Georgia could lead in a big way,” he said.

Kemp has not laid out his health care strategy for this session, and a spokesman did not respond to a request for comment for this story.

But he has come out for a kind of waiver that is not about Medicaid. It’s meant to stabilize premiums on Georgia’s Affordable Care Act exchange; two years ago those premiums skyrocketed by more than half.

It wouldn’t help the childless uninsured people whose income falls below the poverty level, and it wouldn’t do much for those on the poorer end of the exchange, who already are significantly helped by subsidies. For those with little or no subsidy, though, it could bring more calm back to premium prices and maybe even decreases. It could work by bringing in government money to cover some of the one-time big-ticket claims filed by customers on the exchange, relieving their health insurance companies from that burden.

Laura Colbert, the president of Georgians for a Healthy Future, supports outright Medicaid expansion but knows that won’t happen now. She just hopes the possibility of a Medicaid waiver gets a good hearing.

One of her biggest fears, she said, is that “the debate around Certificate of Need has the potential to suck all the air out of the room and leave little capacity for the Legislature to solve more pressing health issues.”

“More than in past years,” she said, “this legislative session could be a big year for health care.”

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