State Senators Krawiec, Bishop, and Hise filed an omnibus health care bill this week. Senate Bill 361 would increase access to care for North Carolinians in a variety of ways. In this research update, I will discuss the three main ways the bill attempts to address the unmet demand for health care services.

Innovation Waiver Slots

Part 1 of the Republican-sponsored health care bill seeks to increase funding for the state’s “Innovations Waiver.” The North Carolina Innovations Waiver would allow for individuals with intellectual or developmental disabilities to receive funds that would enable them to receive the care they need in their own home or the community, rather than in an institutional setting. According to the bill language, the sponsors want to increase the number of waiver slots by 2,000 and increase funding for the program by $41 million. Among other things, the grantees of Innovation Waivers would be able to use the money for personalized home equipment, engagement with the community, development of life skills, education for close family and friend caretakers, or assistance for job training.

The bill sponsors said that roughly 12,000 individuals who meet the criteria for this program are on a wait list to receive the waiver. Also, the average time for wait-listed individuals to receive a waiver is seven years. Funding the slots for 2,000 additional individuals would be a step to further serve the neediest individuals in the state.

Certificate of Need

Part 2 of the bill would repeal North Carolina’s outdated Certificate of Need (CON) laws.  When a new provider would like to build a facility to offer medical services or an existing provider would like to add on to its facility, they must first obtain a certificate from the state. The state grants these certificates to those who apply based on their projected “need” for increased access to a particular service or facility in a given area. However, applying for a certificate is not the end of the process. The competitors who hold similar certificates in that area are allowed to make a case for why the provider should not be allowed to build or expand. Often providers trying to enter the market spend thousands and wait months or years only to learn their certificate has been denied.

CON laws were created to stop health care inflation. The federal government mandated that states implement these laws in the 1970s or they would lose funding. In 1987, the federal government realized these laws failed to achieve their objective at restraining health care cost increases. In the following years, some states repealed their CON laws altogether. North Carolina continues to have one of the most restrictive CON programs in the nation, regulating over 25 different services including low-cost ambulatory surgery centers and drug treatment facilities. Research has shown that CON laws fail to lower costs because they decrease competition, limit the supply of rural hospitals, and increase the distance that individuals have to travel to receive services they need.

North Carolina should finally address this policy which put government control ahead of the freedom of patients and physicians.

Psychology Interjurisdictional Licensure Compact

Part 3 of the bill would add North Carolina Psychology Interjurisdictional Compact also known as “PsyPact.” This is a state licensure compact created by the Association of State and Provincial Psychology Boards. According to the group’s website, the purpose of this pact is “to facilitate telehealth and temporary in-person, face-to-face practice of psychology across jurisdictional boundaries.” Allowing patients to see professional psychologists across state boundaries who have met the licensure requirements of the psychology licensing compact is a supply-side reform that would give North Carolinians additional options to see licensed professionals through a digital platform or in a face-to-face setting.

Although most of the states that have joined the compact are midwestern and western states, North Carolina can be a regional leader by joining the compact. Other states in the Southeast have pending “PsyPact” legislation, and if North Carolina were to enter, it could nudge these states in the same direction. North Carolina should implement reform that breaks down artificial state barriers to access. Other states require these professionals to be licensed to practice. There is no reason not to respect their licenses, as well as the patient’s right to see whichever professional they chose for medical treatment.

We must ensure that our state has enough supply of providers and facilities to meet the needs of our population. Increasingly, those in rural areas are having trouble accessing essential services they need. Health care reform in the state should look at increasing the ability of the market to provide for these individuals. The initiatives in SB 361 attempt to do that by knocking down government barriers that limit the access to crucial health care services for North Carolinians. Also, funding more spots for the Innovation Waiver program will give individuals increased opportunities to receive funding to meet the needs of those who suffer from intellectual and developmental disabilities.