Saturday, March 23, 2024

Bill targeting certificate-of-need process for health-care facilities gets only three votes in House Health Services Committee

State Rep. Marianne Proctor (KL photo by Sarah Ladd)
By Sarah Ladd
Kentucky Lantern

A bill that opponents said would effectively repeal Kentucky’s certificate-of-need law for health-care facilities failed in a strong bipartisan vote of the House Health Services Committee Thursday.

House Bill 204 would have blocked the ability of a dominant provider to sue a certificate-of-need applicant during the process. It failed as 13 committee members voted no, three voted yes and two lawmakers passed.

Both Republicans and Democrats voiced concern that the bill was premature and would place rural hospitals at risk.

The sponsor, Rep. Marianne Proctor, R-Union (Boone County), told legislators that her goal is to open the state to investment by health-care providers.

“This bill does not change any of the process of certificate of need. You still must demonstrate that there is a need and you still must go through this nine-step process,” she said. “What this bill does is just eliminates the dominant provider’s ability to sue you at step three and step nine.”
Speaking in favor of the bill, Heather Lemire, the Kentucky director at Americans for Prosperity, said the process to get a certificate of need in Kentucky is “a very flawed system.”

The requirement mandates regulatory mechanisms for approving major capital expenditures and projects for certain health-care facilities. Such laws were in effect in 35 states and Washington, D.C., as of December 2021, according to the National Conferemce of State Legislatures.

“This [bill] does not address repealing certificate of need,” said Lemire. “But this would at least make it a fair playing ground for people who are wanting to go through the process.”

Among those who testified against the bill, Northern Kentucky lawyer Mark Guilfoyle, who represents St. Elizabeth Healthcare, said Proctor’s proposal “really makes a mockery of the CON process.”

Instead of making a small change to the law, Guilfoyle said the bill would “effectively repeal CON in Kentucky.”

Nancy Galvagni, president of the Kentucky Hospital Association, agreed. The bill “effectively nullifies” the process, she said.

“House Bill 204 makes the certificate-of-need process just another licensing process,” she said. “Communities that are affected by a certificate-of-need application will be denied any process to question or challenge a certificate-of-need application.”

The KHA pitched several reforms to the process last year, and seeks continued study of the issue. A task force met over the interim to study it, and concluded that it needed more study. A resolution was introduced this session to reestablish the task force.

The bill “sidesteps the task force’s recommendations,” Galvagni said.

What do lawmakers think?

Rep. Josh Bray, R- Mount Vernon, echoed concerns expressed in the interim that without certificate of need, new businesses could “cherry pick” profitable services and hurt hospitals in rural areas that lack sufficient population to support multiple facilities.

“While I support the idea of a free market, and at its core, the idea of a free market in health care … sounds great, but the bottom line is, in my part of the state, in rural Kentucky, we don’t have free-market health care. We’re heavily dependent on Medicaid reimbursement rates.”

Getting a certificate of need is “burdensome” and “extremely cost prohibitive,” Bray said, and needs modernization, but he worries this bill could harm rural hospitals.

“It terrifies me that my hospital back home would have to start looking at reducing services they offer in order to be accommodated by another group coming in and cherry-picking services,” said Bray, who later voted against the bill.

Rep. Lindsey Burke, D-Lexington, also voted against HB 204.

“Most of the legislators who I’ve spoken to do have an appetite for reform and I believe that the medical institutions also have an appetite for reform,” Burke said. “I know that the task force can do more research, bring more experts, and we can come up with better solutions than what’s been proposed here.”

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