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Florida Senators Reject Weakening State’s Regulatory Power in Health Care Expansions

| February 17, 2016

certificate of need process ken mattison

When hospitals seek to expand or add certain services, they must get approval from the state through a process that insures that the need for the new services is substantial. Some lawmakers have been trying to do away with that so-called ‘certificate of need,’ an initiative hospitals, including Florida Hospital Flagler (abive) oppose. On Wednesday, a Senate panel killed such a proposal. (© FlaglerLive)

At Monday’s groundbreaking for Florida Hospital Flagler’s latest expansion—a 32-bed wing—hospital CEO Ken Mattison was asked about any worrisome change in state policy that he was keeping an eye on. “What I’m hearing out of Tallahassee, which is concerning, is the potential that certificate of need could be taken away.”

That would mean that many health care providers would no longer need to go through a through a state regulatory process to justify setting up shop or expanding. They could just “cherry-pick” what they want, in Mattison’s words, and open their doors, whether the service is needed or not.

The fear for those who defend the certificate of need process is that its absence would create a degree of unsustainable, needless or possibly damaging competition—damaging, primarily, to patient care if resources are diverted to do battle to protect markets. Those who want to do away with the process say competition would be more robust and care ultimately would benefit.

Mattison need not be further concerned this year. With hospitals, nursing homes and hospice providers lined up in opposition, a Senate panel Wednesday rejected a proposed overhaul the key regulatory process for new health-care facilities.

The Senate Health and Human Services Appropriations Subcommittee voted 6-2 to kill a bill (SB 1144) that would have created exemptions to the certificate of need process. Under that controversial process, the state must review and give approval before new health-care facilities are built.

House Republican leaders have made a priority of trying to eliminate certificates of need for hospitals. But the Senate proposal, sponsored by Sen. Don Gaetz, R-Niceville, took a different approach — proposing exemptions instead of an outright elimination and also including nursing homes and hospice providers.

The defeat of Gaetz’s bill points to bipartisan opposition in the Senate to making major changes in the process and could signal the demise of the issue during this year’s legislative session. Moments after the vote, Gaetz said supporters of revamping certificates of need could try to add the issue to another health-care bill, though it was not clear how that might happen.

“I haven’t got a plan yet,” he said.

The vote also showed the lobbying clout of the hospital, nursing-home and hospice industries in Tallahassee, with groups such as the Florida Health Care Association and the Safety Net Hospital Alliance of Florida opposing the bill. During Wednesday’s meeting, numerous representatives of nursing-home and hospice providers urged lawmakers to vote against the measure.

Under the bill, health-care facilities could have received exemptions to the so-called CON process by meeting thresholds for charity care and, in the case of nursing homes, contributing money to a state Medicaid program that provides services to seniors in their homes and communities. The charity-care proposal stemmed from arguments that eliminating certificates of need would lead to new health-care facilities being built in affluent areas, siphoning away insured patients from existing facilities such as hospitals that serve large numbers of low-income people.

Opponents of the bill said they do not view health care as a free market, in part because payment levels are heavily set through government programs such as Medicaid and Medicare. Sen. Aaron Bean, a Fernandina Beach Republican who voted against the bill, pointed to fears about what would happen to the health marketplace if the certificate-of-need process is overhauled.

“I just don’t feel the market is ready to go forward with it,” said Bean, who joined two other Republicans and three Democrats in voting against the bill.

Sen. Eleanor Sobel, D-Hollywood, said hospitals already are required to provide charity care through their emergency rooms and also alluded to fixed prices in the industry.

“More hospitals will not create more competition in the fixed market,” Sobel said.

But Gaetz said research shows certificates of need increase costs by restricting competition. He said existing health-care providers fear losing a monopoly and that if the issue was “decided on the weight of the evidence, I know this would pass.”

“What we’re left with is an understandable fear of the consumers’ ability to choose,” Gaetz said.

But the Florida Health Care Association, which includes nursing homes throughout the state, said the vote kept in place an effective certificate-of-need process for the industry.

The state long had a moratorium on new nursing homes, as it tried to move more seniors into home- and community-based services. But lawmakers in 2014 made changes that have opened the door to about 30 new nursing facilities, according to the association.

“The certificate of need process adopted for nursing centers two years ago ensures thoughtful, managed growth where there is a demonstrated need for more nursing beds,” Emmett Reed, the association’s executive director, said in a prepared statement. “The existing process is working to provide stability in the marketplace and well-considered location of nursing beds where they are most needed. That’s the smart way to care for Florida’s elders.”

–News Service of Florida and FlaglerLive

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