Why a divide over hospital rules is roiling Georgia politics

Credit: Jason Getz / Jason.Getz@ajc.com

Credit: Jason Getz / Jason.Getz@ajc.com

The General Assembly is primed for a new battle over hospital regulations that has divided some of Georgia’s most powerful politicians and could shake up the final days of the state’s legislative session.

Powerful forces are rallying for and against Senate Bill 99, which would allow the construction of new hospitals in counties with fewer than 50,000 people without a “certificate of need” from state regulators.

Some of the state’s largest health care systems have fiercely fought changes to the decades-old program, saying the regulatory process helps rein in rampant medical spending and prevents hiring wars between rival hospitals in small communities.

But opponents of the law call it outdated and say it helps preserve the dominance of powerful hospitals. Removing the certificate requirement, they say, could pave the way for more accessible health care in rural areas.

Now new players are entering the fray.

Credit: Arvin Temkar/AJC

Credit: Arvin Temkar/AJC

Lt. Gov. Burt Jones, a newly elected Republican, has made the overhaul a foremost priority, saying it would help provide “quality health care” for underserved communities. But his family business could also directly benefit from the proposal, sparking concerns of a conflict of interest.

House leaders have so far balked at approving the legislation to overhaul the health care rules, which has already passed the Senate and is now awaiting a vote in the House Health and Human Services Committee.

And Gov. Brian Kemp’s office has quietly raised issues with the measure, partly because of concerns it could threaten fragile negotiations involving the future of the Medical College of Georgia.

The standoff could cause collateral damage in the closing days of the session, when lawmakers sometimes hold legislation “hostage” to be used in a trade for the passage of other legislation.

Senate leaders indicated they could block the next phase of Georgia’s landmark mental health legislation if the hospital rules aren’t rewritten. That sweeping package was a defining piece of the late House Speaker David Ralston’s legislative legacy.

And a renewed attempt to legalize sports betting could also be caught in the crossfire, despite Jones’ hope for lawmakers to render a “verdict” on expanding gambling in Georgia for the first time in decades.

‘Significant harm’

What’s driving the sudden traction of legislation that has stalled for years under the Gold Dome?

Supporters of the overhaul often bring up a proposal for a privately owned 100-bed hospital that could be fast-tracked for Jones’ native Butts County if the certificate of need program is rolled back.

Jones’ father, Bill Jones, has long advocated for a new hospital that could be built on a 250-acre tract of land he assembled for roughly $30 million near a sprawling new development along I-75.

Although renderings provided by Butts County depict a hospital campus on parcels owned by Bill Jones’ firm, the lieutenant governor’s office says the land hasn’t been designated yet for the medical complex and the project is not finalized.

The Jones camp is lining up against the Wellstar Health System, which said the proposed hospital could not only threaten the Sylvan Grove facility it operates in Butts County but also a complex it runs in nearby Griffin.

At a February hearing, Wellstar General Counsel Leo Reichert said the system has spent millions to improve Sylvan Grove, an aging 25-bed complex, and he warned a new hospital project would bring “significant harm” if it closes.

The Cobb County-based health care system has drawn criticism from Georgia leaders for shuttering the Atlanta Medical Center last year, a closure that triggered calls from Democrats for a federal investigation into Wellstar’s practices.

Meanwhile, Butts County Commissioner Joe Brown said the local hospital authority’s lease with Sylvan Grove runs through 2026, so there is tremendous pressure to secure a deal now.

“We can’t wait until 2026 to make a decision,” Brown said. “It’s about a three or four year process to build a hospital.”

‘New car smell’

It’s impossible to disentangle the debate over hospital rules from a separate initiative involving the health care giant.

Wellstar is negotiating a deal to partner with — and possibly take over — the Augusta University Health System. As part of the overhaul, lawmakers recently approved spending $105 million to upgrade the records for the Medical College of Georgia, a unit of the Augusta system.

State officials worry that Wellstar could abandon the negotiations if the certificate of need program is scaled back. Sonny Perdue, the chancellor of Georgia’s higher education system, told The Atlanta Journal-Constitution that Wellstar considers the legislation a deal-breaker.

“That agreement in partnership is so critical to the future of the Medical College of Georgia and to medical education in Georgia,” Perdue said in an interview. “We don’t want to jeopardize that.”

At a private luncheon Tuesday, Perdue and top Kemp aide Trey Kilpatrick met with House Republicans to “highlight the risks” that the legislation would pose to the pending deal, according to several people in the room.

Senate budget-writers fired back late Tuesday by slashing $105 million from the higher education system’s budget in a spending plan for the upcoming year -- the exact cost of the medical upgrade -- in the latest sign of the growing tensions between the two chambers.

And on Wednesday, a Senate committee approved legislation that would strip Wellstar of lucrative sales tax exemptions, a new attack that seems certain to be scuttled in the House.

Credit: Natrice Miller / Natrice.Miller@ajc.com

Credit: Natrice Miller / Natrice.Miller@ajc.com

Some House Republicans have raised their own concerns. At a House Health and Human Services Committee hearing on Tuesday, several questioned the rush to pass the measure. Among them was state Rep. Mark Newton, who reminded his colleagues that it’s a “two-year session.”

And a handful of hospital executives spoke in grave terms about the legislation. Bill Lee of Evans Memorial Hospital said his aging Claxton facility can’t compete against a “brand-new hospital that has a new car smell.”

“It keeps me up at night,” he said of the prospect of changes to the certificate of need program.

He echoed the view of supporters who worry scaling it back could lead to dozens of at-risk hospitals being forced out by private medical centers that don’t offer emergency services and steer clear of poorer areas.

The program, which dates to the 1970s, was designed to control health care spending and spread services across rural areas. The rural hospitals funded by a 1946 federal law could often not survive, their advocates say, if investors were allowed to cherry-pick their few profitable services and leave them with the money losers, such as emergency care for the poor. In fact, between 2011 and 2021, eight of the state’s rural hospitals shut their doors for good.

But the legislation has also sparked a divide among health care giants. Thomas Worthy of Piedmont Healthcare, the largest not-for-profit health system in Georgia, told lawmakers the overhaul could trigger “expeditious” expansion in counties with shuttered hospitals or no health care facilities at all.

Then there are those who agree with the scathing take of Billy Mathis, the chair of the Lee County Board of Commissioners, who has been locked in a yearslong battle with regulators over a new 50-bed hospital he supports for his southwest Georgia community.

“The system is rigged. It’s rigged in favor of monopolies, and we see what monopolies give us,” he said. “Unfortunately, many will continue to leave the area in search of better quality health care.”

Staff Writers Zach Hansen and Vanessa McCray contributed to this report.