by Brenée Goforth
Communications Associate, John Locke Foundation
According to recent article in Carolina Journal by Julie Havlak, certificate-of-need (CON) legislation, HB 126, passed the Senate Health Committee on Monday. The bill, Havlak writes, would:
loosen restrictions on buying medical equipment, and CON laws would be lifted from kidney disease treatment facilities, psychiatric care and chemical dependency facilities, and certain continuing care facilities, among others. Ambulatory surgery centers — outpatient facilities that charge less for services than do hospital outpatient departments — would be free to expand into multi-specialty services.
Facilities could spend up to $2 million on a piece of equipment before applying for CON permission — a jump of more than $1.2 million dollars from previous monetary thresholds. The bill also contains a provision to adjust the cost threshold with inflation beginning in 2022, as well as new time limits.
Under current CON laws, hospitals and medical providers must submit an application to the state planning board and receive approval before building or expanding facilities. These reforms are a long time coming, as North Carolina is ranked fifth for toughest restrictions on health providers. Havlak explains:
CON laws are a child of the 1970s, when Congress used federal funding to encourage states to adopt CON regulations. Only Louisiana refused at the time.
But a decade later, the federal government had repealed the CON mandate and 12 states removed the requirements. Now, both the Federal Trade Commission and the Department of Justice have called for their repeal.
According to Sen. Joyce Krawiec, R-Forsyth:
“If you look at the statistics and the studies, nobody would be in favor of CON. The outcomes in states that have CON are worse: they have fewer rural hospitals, there is less access to hospice care, health outcomes are worse, health costs are higher — I could go on and on… It’s time we started looking at reform and moving forward.”
HB 126 passed the Senate Rules Committee on Tuesday and was scheduled to be heard on the Senate floor on the 22nd of this month.