Georgia House proposes bill to ease opening of more rural hospitals

State Rep. Butch Parrish, a Republican from Swainsboro, is sponsoring legislation that would roll back regulations to build new hospitals in counties with fewer than 50,000 people. (Bob Andres / AJC)

Credit: Bob Andres/AJC

Credit: Bob Andres/AJC

State Rep. Butch Parrish, a Republican from Swainsboro, is sponsoring legislation that would roll back regulations to build new hospitals in counties with fewer than 50,000 people. (Bob Andres / AJC)

Georgia hospitals, particularly those in rural areas and those providing psychiatric care, could open or expand more easily under a new House bill backed by the chamber’s Republican leaders.

House Bill 1339, sponsored by state Rep. Butch Parrish, would roll back regulations to build new hospitals in counties with fewer than 50,000 people. It would also increase the pool of tax credits from $75 million to $100 million for taxpayers who donate to rural hospitals.

“We want to take incremental steps to move in the right direction,” Parrish, a Republican from Swainsboro, said during a House Health Committee hearing Wednesday. “It’s not going to be a one-size-fits-all fix and not a silver bullet. But it’s moving in the right direction.”

It leaves intact other parts of the regulatory process, known as the certificate of need system, or CON. That sets up a clash with the Senate, whose leaders have endorsed an effort to repeal the entire system.

Hospitals worry that scaling back the system will make them fight over talent and profit, while some — particularly in rural communities — have said the burdensome process leads to years of delays and scares away potential investment.

To open a new hospital in Georgia under current law, hospitals must demonstrate a significant need for care. The rules were created to help control the costs of government reimbursements for Medicaid and Medicare.

In the House bill, those rules would be eliminated for rural hospitals so long as they meet certain criteria, including providing instruction for medical residency students and psychiatric care.

House Speaker Jon Burns supports the bill and assigned it to the House Health Committee on Tuesday.

“The speaker believes that this is a comprehensive, robust piece of legislation that will increase transparency, accountability and access to health care across our state while also supporting our rural hospitals, and looks forward to its favorable consideration from the lieutenant governor and Senate,” Burns spokesman Stephen Lawson said.

Still, this legislation is only a first step in a lengthier process.

Both the state House and state Senate are crafting versions of legislation easing CON rules. However, the House version would seek a more limited path, preserving CON rules in certain circumstances, compared with the Senate’s preference aiming to repeal all CON provisions.

“I’m glad to see the House take up this effort to increase competition in the health care marketplace and reduce costs for Georgia families,” Jones said in a statement, adding that he would continue to make overhauling CON “a reality.”

Under the House proposal, hospitals at 60% or greater capacity for a continuous 12-month period could expand capacity by up to 20% without needing CON approval. The bill does not specifically address workforce concerns, including the fact that many hospitals have not had enough staffing to keep all beds available to them open.

However, the legislation does seek to support medical residency programs by removing CON requirements for acute care facilities in rural counties that agree to be teaching centers, providing instruction to medical residency students.

Hospitals in rural counties would also have to agree to provide psychiatric care in order to be exempt from CON rules. And hospitals would not have to go through a CON process if they expand beds for inpatient psychiatric or substance use treatment or provide charity care for low-income and uninsured patients for at least 5% of the hospital’s adjusted gross revenue.

Ambulatory surgical centers — nonhospital facilities that provide outpatient surgical care — would not be exempt from CON rules under the House bill. Hospital advocates have voiced concern over removing CON rules because they say doing so would allow more surgical centers to open, which could draw away wealthier patients from rural hospitals, leaving them to care for lower-income patients, many of whom can’t afford to pay.

Monty Veazey, president of the Georgia Alliance of Community Hospitals, said the House legislation is “a good starting point.”

The bill also would increase penalties on hospitals that fail to produce required hospital reports, such as those pertaining to how much debt and revenue they hold and how many people they have treated.

Lawmakers seeking to expand poorer Georgians’ access to Medicaid had hoped to pair expansion with changes to CON rules. That may have to wait. The House bill would relegate Medicaid expansion to a study commission to review access to health care for low-income and uninsured populations.

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