In the latest edition of the North Carolina Register’s proposed rule making, the state Department of Health and Human Services (DHHS) proposes to repeal six administrative rules related to the state’s restrictive Certificate of Need law – one in which medical professionals and hospitals are required to ask the state permission (and then their competitors) to establish new health facilities or update major medical equipment.

If repeal goes into effect by the end of the year, then the CON administrative process will be a bit lighter for parties interested in applying to be licensed as a diagnostic center or to purchase medical equipment/technology inclusive of CT scanners, x-rays, mammography, ultrasound, echocardiography, or nuclear medicine.

For example, let’s say that your local urology group wants to upgrade its CT equipment. The CON application for that equipment would no longer require these physicians to find the following evidence that justifies why upgrading CT equipment is necessary for the medical community.

  • Documentation that surrounding market competitors and affiliated health facilities are using their CT equipment at 80% of operating capacity within the past year.
  • Documentation that the applicant’s current CT equipment is projected to or has reached 80% maximum operating capacity within three years of initial acquisition.
  •  Documentation that the applicant’s utilization projections are based on the experience of the provider and on epidemiological studies.

While repealing these rules would definitely reduce the time commitment to file a CON application, the larger issue at hand is that CON still leaves central planners with the final say on any diagnostic center expansions or updates that exceed $500,000 (this threshold, by the way, has not kept up with medical inflation since 1994).

The Carolina Journal has the full story here.