ATLANTA — Georgia lawmakers are looking to get rid of Certificate of Need (CON) requirements statewide for health care facilities after the recent approval of a bill to get rid of the requirement for hospitals in rural counties.
The Senate, in a 42-13 vote Monday, approved Senate Bill 99, which would exempt acute care hospitals looking to locate in rural counties (or counties with less than 50,000 residents) from adhering to CON requirements.
State Sen. Greg Dolezal, the bill’s sponsor, said the proposal is the result of an undisclosed health care developer’s interest in building another hospital in Butts County where the population is less than 26,000. The county currently has Wellstar Sylvan Grove Medical Center in Jackson.
Democrat Sen. Nan Orrock said SB 99 appears to be an attempt to skirt regulations, and would ultimately allow hospitals to still get benefits from the state as a rural hospital designation even when it’s no longer a rural hospital with future population growth.
“Why are we doing all this special privileged treatment for this?” Orrock asked.
At a previous committee hearing, opponents of the bill argued that the bill could hurt hospitals by forcing them to compete with an already struggling workforce.
CON requirements were signed into federal law in the mid-1970s as a way to assess the availability and duplication of health care services within a certain radius. It was later repealed by Congress nearly a decade later. According to the Mercatus Center in a 2016 report, 35 states and the District of Columbia still had CON restrictions.
“You have other states like Florida, who have done partial CON repeals where they still require it for long-term care facilities that did not require it for ambulatory surgical centers, acute care, hospitals, etc.,” said Dolezal, a Cumming Republican senator. “And then of course, Georgia has been in a somewhat periodic stance of regularly reviewing these laws to ensure they best fit the needs of our citizens.”
Sen. Bill Cowsert, chair of the Senate Regulated Industries and Utilities Committee, which favorably reported the bill the previous week, said the rural counties CON exemption would be the 30th CON exemption approved in Georgia.
“It’s under the area of the Certificate of Need law that carves out exceptions in areas where health care service providers do not have to go through this cumbersome, archaic, slow, tedious process of getting permission to provide health care services,” Cowsert said. “That’s all this does is eliminate that need to go ask the State Department of Community Health so they may provide services to poor people in rural Georgia.”
SB 99 would apply to new hospitals in rural counties in which 10% of its income would come from indigent and charity care, and the hospital would be required to accept Medicaid and Medicare patients.
The proposal now heads to the House of Representatives.
Another proposal making its way to the Senate is SB 162, a broader proposal to get rid of CON requirements in most areas of health care.
Sen. Ben Watson, sponsor of SB 162, said the bill instead creates a special health care license and would go into effect in January 2024.
Opponents of CON say the restriction has contributed to the rising cost of health care.
Jesse Weathington is president of the Georgia Association of Health Plans. GAHP assesses health care policies and their impact on cost, quality and access to care, he said.
“CON has a perverse effect of increasing costs by creating scarcity and creating local monopolies, which take full advantage of their market power to aggressively increase prices,” said Weathington. “(CON) reduces access by creating scarcity in underserved communities, which will continue to remain underserved when that hospital closes despite its purported ability to protect hospitals from closing. They are still closing but it does still represent a barrier to replacement facilities being put into a community where there’s a gap in care.”
Tony West, Georgia deputy state director for Americans for Prosperity, claimed CON mandates have caused the state to lose millions of dollars in health care investments by turning away providers.
“The true cost of CON is unknown and certainly greater than it would show up on paper,” West said. “Prohibitive application costs and the threat of competitor opposition preclude many providers from ever applying to offer services they otherwise would.”
However, Thomas Worthy, vice president of external affairs for Piedmont Healthcare, a not-for-profit health system, said CON helps provides balance and that a repeal of CON does not guarantee positive outcomes in health care costs and accessibility.
“Piedmont strongly and unapologetically believes that this state plays an important role in health planning that guarantees consistency, knowing health gaps among the most vulnerable children that the industry and the free market are not capable of identifying, and more importantly, guaranteeing bonds and other local financing are so important for hospitals,” he said.
Anna Adams of the Georgia Hospital Association, which represents 150 hospitals in the state, encouraged legislators to look at the effect of the proposed law on a more localized level.
“We would appreciate more time to be able to look at this on a facility-level basis, and I would encourage you to reach out to your local hospitals,” Adams said. “I think the impact of this is going to be different for rural facilities, for larger facilities for psychiatric facilities, etc. It’s not just a one size fits all.”
The bill, as of Monday, had not yet been voted on in committee.
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