ATLANTA – At this year’s General Assembly, the state Senate considered reforming or repealing Georgia’s decades-old Certificate of Need (CON) law, which governs hospitals and health services.
As summer begins, all indications are that Republican senators will continue to aggressively pursue their push to revise or abolish the CON. A newly established Senate Study Committee made up of senators, health care executives and an insurance industry representative will begin its meeting on June 13 to explore ways to at least reform the law.
The Senate study committee on needs assessment reform is expected to begin its work earlier than most legislative study committees, which typically meet in the summer.
“It definitely shows the importance of the issue, especially for the Senate,” said Chris Denson, director of policy and research at the Georgia Public Policy Foundation, a think tank that advocates pro-market approaches to public policy issues.
Under Georgia’s CON law, applicants wishing to build a new medical facility or provide a new healthcare service must demonstrate to the state Department of Health that the facility or service is needed in that community.
The General Assembly passed the law in 1979 to fulfill a federal mandate aimed at reducing health care costs by avoiding duplication of effort, but in 1986 Congress repealed the federal law. By 1990, eleven states — including California and Texas — had abolished it with their state CON statutes.
This year’s push to reform or abolish CON in Georgia came primarily through two bills introduced by Senate Republicans. Senate Bill 99 called for most rural hospitals to be exempt from the law, while Senate Bill 162 would have repealed CON entirely except for long-term care facilities.
South Carolina lawmakers this year repealed the Palmetto State’s CON statute, also with the exception of long-term care facilities.
Senate Bill 99 passed the Senate by a vote of 42 to 13, including the votes of nine Democrats, but was defeated in the Georgia House of Representatives. The repeal bill was approved by the Senate Committee on Regulated Industries and Utilities, but did not reach the Senate for a vote.
Denson’s group supports repeal of CON. He and Matthew Mitchell, a researcher at West Virginia University, released a report in April that points to barriers to health care access that the CON laws impose and challenges the argument that removing the law would lead to a wave of hospital closures.
“Fears of widespread hospital closures with safety nets are overblown,” Denson said. “There is no link between CON laws and the closure of rural hospitals.”
Monty Veazey, president and CEO of the Georgia Alliance of Community Hospitals, said that facilitating the construction of new hospitals and outpatient surgery centers by repealing the CON Act would not improve access to health care in rural communities, as supporters of the repeal argue.
“These hospitals are not being built in rural areas,” Veazey said. “They are built in zip codes where the money is. … It’s all about the money.”
The Senate Studies Committee is dominated by Republicans — including Sens. Greg Dolezal of Cumming, who will chair the panel; Kay Kirkpatrick from Marietta; Matt Brass of Newnan; Bill Cowsert from Athens; and Ben Watson of Savannah. Democrats on the committee include Sens. Freddie Powell Sims of Dawson and Ed Harbison of Columbus.
Non-legislators on the panel include Mark Baker, CEO of Jack Hughston Memorial Hospital, representing for-profit healthcare systems, Matt Hasbrouck, CEO of Memorial Health Meadows Hospital, representing rural hospitals, Christine Macewen of Piedmont Health Care, representing non-profit healthcare systems, and the Georgia Association of Health The plan is for CEO Jesse Weathington to represent the insurance industry and independent physician Dr. Stephen Wertheim represents.
Meanwhile, the House of Representatives is also expected to comment on CON this summer and fall.
Members of the House of Representatives voted to create a study committee on CON on the last day of this year’s legislative session. Its members have yet to be appointed.
