NC certificate of need repeal gets hearing; future uncertain


RALEIGH, N.C. (AP) — Legislation to repeal North Carolina’s certificate of need requirements before building hospitals and other medical centers and purchasing high-tech diagnostic equipment got support Tuesday from some physicians and conservative activists in a Senate committee.

It’s unclear, however, if Senate Republicans will try to push through their chamber this year the legislation, which is opposed intensely by the North Carolina Hospital Association. No vote was taken by the Senate Health Committee, whose leaders are now sending the matter to the chamber’s GOP caucus for private discussion. The bill would have to get through the full Senate and House in the legislature’s final weeks.

“We’re going to be reporting on what we heard today,” said Sen. Louis Pate, R-Wayne, a committee co-chairman. “We’ll see what the members of the caucus have to say.”

The measure would eliminate in early 2021 the requirement that state health regulators sign off on any “new institutional health service.” The certificate is designed as a way to ensure the orderly distribution of health care statewide based on population and to encourage services in rural areas. At least 14 states have discontinued their programs since a federal mandate for having such rules ended in the 1980s.

Repeal proponents told committee members that North Carolina’s program has led to higher medical costs for patients by blocking competition and has required rural residents to travel out of their home counties for specialized services. A more market-based system would control expenses and more quickly align services with a local population’s needs, they say.

“This is an outdated law,” said Katherine Restrepo, a health-policy analyst with the conservative-leaning John Locke Foundation. “The basic principle of certificate of need is to improve access to health care to make sure there’s this equitable distribution of resources in (rural) areas, but it has failed to deliver on this promise.”

Dr. Charles Ford, the owner of an ear, nose and throat medical practice in Boone, said certificate of need rules promote higher medical expenses for his patients who use the local hospital for surgical procedures. He said one common aural procedure for children can be performed at one-third the price at a surgical center in Hickory, 45 miles away.

“Thousands of dollars are wasted with every case I perform,” he said.

But Cody Hand with the N.C. Hospital Association said certificate of need preserves what little stability there is to a health care system in North Carolina facing changes from an approaching state Medicaid overhaul, the 2010 federal health care law and other mandates.

“What we need from you as a state legislature, and as frankly the protectors against the federal government, is some stability in that market,” Hand said in opposing the repeal.

Carol Meyer, CEO of an organization representing hospice and palliative care providers in North Carolina and South Carolina, said certificate of need ensures quality services and helps control costs. “Eliminating CON will undoubtedly drive up the cost of hospice care,” she said.

Democratic committee members told bill manager Sen. Ralph Hise, R-Mitchell, improving the regulations, rather than repealing them, was the way to go. A Republican, Sen. Fletcher Hartsell of Cabarrus County, questioned the 2021 repeal date and how the end of certificate of need could affect the ability of medical providers to get financing for building projects when service markets would become uncertain.

Last year’s Senate budget contained a requirement phase-out by 2019 but it wasn’t in the final spending plan.

Certificates also are required before a medical provider can offer services such as open-heart surgery or neonatal intensive care, or to change the number of beds in a hospital.

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