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Bill to reform health care laws over buildings and facilities clears second committee

Bill to reform health care laws over buildings and facilities clears second committee

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A less-aggressive attempt at reforming the state’s certificate-of-need laws over health care appears on track for a Senate floor vote as early as next week.

A certificate of need is required before a health care system or provider can build a facility, buy equipment, or offer a surgical procedure, among other things. There are 28 health-care scenarios affected by the law, which took effect in 1978.

Senate Bill 361 cleared the second of three committee steps Thursday after receiving Finance recommendation. It now goes to Rules and Operations.

The latest version reflects a significant change from the initial language.

Bill sponsors no longer seek to repeal the CON law, an effort that has been rebuffed by the House in previous legislative sessions.

Sen. Joyce Krawiec, R-Forsyth, and primary bill sponsor, said Thursday that the changes to SB361 would make it easier to open ambulatory surgical, diagnostic and kidney dialysis centers, chemical dependency treatment facilities, intermediate care for those with intellectual disabilities, psychiatric hospital and home health agencies by a continuing care retirement community.

Language creating the CON exemptions also is included in the Senate’s state budget proposal. House and Senate budget writers are negotiating compromises on their proposals.

Reducing the effectiveness of the CON law “is just a difficult bill for House members to embrace, so not sure it gets much traction,” said Rep. Donny Lambeth, R-Forsyth. Lambeth is a leading House health care expert and a key House budget writer.

The primary goal is to prevent unnecessary duplication of services within a community or region as a means of controlling costs.

The inherent limitations in the CON program have helped fortify the revenue streams of not-for-profit health care systems, such as Cone Health, Novant Health and Wake Forest Baptist Medical Center.

“It’s time for us to change how restrictive North Carolina CON laws are,” Krawiec said.

One carrot offered by Republican leadership in the Senate budget proposal is increasing the number of intellectual/developmental disabilities (I/DD) Medicaid innovation waiver slots by up to 1,000 at a cost of $32 million over two years. Services include personal care and in-home assistance.

Key elements in SB361 include the same number of I/DD waiver slots, but with a $41 million price tag.

CON opponents claim that adding competition, particularly from for-profit groups, would lead to the opening of a host of new services and facilities, including more acute-care hospitals, diagnostic centers and rehabilitation centers.

They say competition would force more providers to lower fees for high-risk procedures. Several cost-comparison websites have shown the costs of some of those procedures can vary by tens of thousands of dollars within a region.

Opponents say ending the law would allow for-profit groups to cherry-pick the most profitable medical procedures, leaving not-for-profit hospitals to handle in their emergency departments more of the sickest of the sick, who often don’t have health insurance.

“The House is working to release its version of a health care bill in the next few weeks and we are looking at potential options that the House membership may be supportive of,” Lambeth said.

The N.C. Healthcare Association opposes repealing CON laws, saying they would cost thousands of health-care jobs statewide, including in rural communities.

“At a time of significant change in health-care in our state, we believe now is not the time to discuss changes to the law,” spokeswoman Julie Henry said Thursday.

Lambeth said the House “is working to release its version of a health care bill in the next few weeks, and we are looking at potential options that the House membership may be supportive of.”

“But at this time, we are not supportive of the Senate bill even with modifications.”

Reforming or repealing CON restrictions has been a higher-priority item for state Senate leaders in recent years than for their House counterparts, said Mitch Kokai, senior policy analyst with Libertarian think tank John Locke Foundation.

Kokai said he wasn’t sure whether Democratic Gov. Roy Cooper would directly oppose the Senate’s CON changes, whether in SB361 or in the state budget.

Cooper has made clear his opposition to the House and Senate budget proposals, in part because they lack Medicaid expansion language, as well as too little funding for public school education and environmental issues.

“It would not surprise me to see the governor accept CON reforms if he could gain support for some version of Medicaid expansion,” Kokai said. “Without any action on Medicaid, he might be more inclined to raise objections.”

Kokai cautioned, however, that “I would guess that Senate leaders are dead set against Medicaid expansion.”

N.C. Senate majority leader Phil Berger, R-Rockingham, in particular, has been vocal in his opposition to any bill that could expand Medicaid coverage, which experts say would add 450,000 and 670,000 North Carolinians to the Medicaid rolls. 336-727-7376 @rcraverWSJ


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