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A national push to eliminate certain health care regulations has made its way to Mississippi, where free-market philosophy often influences policy decisions.
Health care providers looking to expand some services are required to receive a “certificate of need” from the state Department of Health.
The certificates ensure facilities and services are added to communities that can support them, but one lawmaker thinks the requirement gives large health systems an advantage.
“Basically a certificate of need is a monopoly certificate,” said Rep. Robert Foster, R-Hernando. “It gives you a monopoly for a certain service.”
The House Public Health and Human Services Committee will meet Monday to discuss the certificate of need process and possible changes.
Certificates of need became a federal requirement in 1974 for states to continue receiving certain federal health care dollars. The certificating process was intended to control costs and increase access, charity care and quality of care.
“By reviewing proposals for the location and scope of new health facilities or expansions of current facilities, the Certificate of Need process helps ensure that the quality of available care remains high while preserving health care access to as much of the state as possible,” reads a recent newsletter from the Health Department.
The process requires an applicant to show the service 1) is needed 2) does not duplicate an existing service and 3) does not discourage access to care by a patient who cannot afford to pay for it. The argument has been that health care entities like hospitals like to locate in good-income areas because they make money and draw paying patients away from smaller hospitals that have no way to balance the care they offer Medicaid and Medicare recipients and the uninsured,.
Twelve years after it became a federal mandate, Congress repealed the certificate of need requirement. Since then, 15 states have eliminated their versions of the law.
Mississippi has certificate of need laws regulating 18 different service areas like dialysis, radiation therapy, mental health, rehabilitation and hospital and nursing home beds. Sixteen states regulate more services with certificates of need than Mississippi.
Foster wants the state to stop requiring physicians to get the certificate to perform procedures, buy new equipment or open outpatient surgery centers. A bill he wrote to accomplish this, HB 48, died in committee last legislative session.
The physicians in question, Foster noted, already have to be licensed.
“They should not have to get permission from the state to perform that service they have a license for,” Foster said. “The problem is they cannot get a CON to do what they’re trained to do. They can’t open their own private practice. They have no option but to work for one of the corporate medical companies in our state.”
During the certificate application process, other providers, including large corporations, have the opportunity to challenge the justification for the additional service.
“The big corporate health care providers will argue at CON hearings, ‘If you allow this small clinic to do these services or buy these machines, it’s going to affect our profit so much that it will bankrupt our hospital and we’ll close and then you won’t have a hospital,'” Foster said.
Foster said the process can get expensive for the applicant to make its case against the challenger.
“They should not have to go fight a legal battle with a major corporation just to buy an updated or new type of machine,” Foster said. “We need more health care and need the cost to go down, and the only way to do that is to have competition.”
Questions about the effectiveness of the certificate are not new but had been overshadowed in recent years by debate over the Affordable Care Act.
“If it looks like a number of states are reevaluating their CON laws right now, that’s because they feel their hands are tied on doing much else, such as making major adjustments to coverage mandates or other insurance regulations,” said Jameson Taylor, Mississippi Center for Public Policy vice president for policy.
Considering attempts in the last six months to repeal the Affordable Care Act, eliminating certificates of need could create “additional instability in the market,” said Richard Roberson, vice president of policy and state advocacy for the Mississippi Hospital Association, “which is a huge concern for hospitals and other providers as well.”
The Mercatus Center at George Mason University, a think-tank focused on free-market research, estimates based on national data that eliminating certificate of need requirements could reduce health care spending in Mississippi by $208 per patient per year.
The data is tempered by the fact that in Mississippi, just 5 percent of certificate of need applications are denied, whereas other states have much higher denial rates.
Matt Mitchell, Mercatus researcher and director of its Project for the Study of American Capitalism, notes the possibility of providers opting to forgo expansions altogether to avoid the cost and hassle of justifying the need for services.
“How many people just don’t even ask for it because they know it’s a daunting process?” Mitchell asked.
Mercatus research indicates rural areas in states with certificate of need requirements have fewer hospitals than those without and estimates that doing away with the regulation could increase the number of rural hospitals in Mississippi from 74 to 106.
So far this year, the state has received seven applications for certificates of need from the following facilities: Forrest County General Hospital, Bedford Care Center, Renal Care Group Meridian, Renal Care Group Senatobia, Fresenius Kidney Care Southwest Jackson, Fresenius Medical Care South Mississippi Kidney Center.
Since 1986 when the Health Department began administering the certificate of need program, it has reviewed more than 1,400 applications corresponding to $5 billion in capital expenditures.
Mercatus report: Mississippi requires health care professionals to receive a certificate of need to provide the following services:
- Acute hospital beds
- Ambulatory Surgical Centers
- Cardiac Catheterization
- Gamma Knives
- Home Health
- Intermediate Care Facilities for Individuals with Disability
- Long-Term Acute Care
- Magnetic Resonance Imaging (MRI) Scanners
- Mobile Medical Imaging
- Nursing Home Beds/Long-Term Care Beds
- Open-Heart Surgery
- Positron Emission Tomography Scanners
- Psychiatric Services
- Radiation Therapy
- Renal Failure/Dialysis
- Substance/Drug Abuse
- Swing Beds
Contact Anna Wolfe at 601-961-7326 or firstname.lastname@example.org. Follow her on Twitter.
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