CON Overhaul Gains Final Passage in General Assembly

Dave Williams

Monday, March 25th, 2024

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Legislation containing the most significant reforms in decades to Georgia’s law governing hospital construction and new medical services is on its way to Gov. Brian Kemp.

The General Assembly give final passage late Thursday to a bill loosening restrictions in Georgia’s Certificate of Need (CON) law.

The state House of Representatives passed the measure 95-68, followed a short time later by the Georgia Senate, which passed it 34-17. Both votes were largely along party lines in the Republican-controlled chambers after legislative Democrats argued it doesn’t go far enough to increase access to quality health care.

House Bill 1339 makes fewer far-reaching changes to the CON law than a version of the legislation the Senate passed on March 14. The Senate measure had drawn substantial opposition from the hospital industry and patient advocacy groups.

“This bill is not perfect,” Rep. Butch Parrish, R-Swainsboro, the measure’s chief sponsor, told his House colleagues shortly before Thursday’s vote. “But it’s a great start in the right direction.”

The CON law requires applicants wishing to build a new health-care facility or provide a new medical service to demonstrate to the state Department of Community Health that the facility or service is needed in that community.

The General Assembly passed the law in 1979 to comply with a federal mandate aimed at reducing health-care costs by avoiding duplication, but Congress repealed the federal statute in 1986. By 1990, 11 states – including California and Texas – had done away with their state CON laws.

The law’s opponents have long argued the CON process is so time-consuming, cumbersome, and expensive that it delays and sometimes blocks efforts to boost access to health care. The issue is particularly critical in the health-care “deserts” of rural Georgia.

House Bill 1339 takes on the problem by exempting proposals to build hospitals in rural counties from having to obtain a CON if they plan to have a full-time emergency room, accept psychiatric and substance-abuse patients, participate in Medicaid, provide indigent care, and offer a training program.

“This should make it easier for hospitals to be build in rural Georgia,” said state Sen. Bill Cowsert, R-Athens, who carried the bill in the Senate.

The legislation also includes provisions aimed at specific hospital projects. It would allow rural hospitals that have been closed to reopen without a CON, a provision aimed at the planned reopening of a closed hospital in Cuthbert.

Another provision exempting a proposed hospital in southern Fulton County from having to get a CON would pave the way for a new facility to replace the Atlanta Medical Center, which closed its doors in 2022.

The legislation also would raise the state’s rural hospital tax credit from an annual cap of $75 million to $100 million.

In an olive branch to those who argued the changes don’t go far enough, the bill also would create a state commission to look for additional ways Georgia could improve health-care access.

The House refused to go along with more substantive changes to CON sought by the Senate, including a provision that would have allowed physicians to open multiple-specialty surgical centers without a CON. Physician-owned single-specialty centers already may open in Georgia without a CON thanks to a change in the law the General Assembly enacted in 2008.

Representatives of the hospital industry were worried that a further loosening of CON to allow multi-specialty centers would flood the state with facilities that would siphon off paying patients from hospitals, leaving them with an untenable burden of uninsured patients.

“That hits directly to the bottom lines of hospitals,” said Monty Veazey, president and CEO of the Tifton-based Georgia Alliance of Community Hospitals.

Anna Adams, executive vice president for external affairs at the Georgia Hospital Association, said her organization supports provisions in the bill doing away with spending thresholds governing hospital construction projects, streamlining the CON application process, and exempting labor and delivery services from CON.

While legislative Democrats supported many aspects of the bill, most balked at voting for it because majority Republicans wouldn’t go along with expanding Medicaid coverage in Georgia. Democrats have pushed for Medicaid expansion for more than a decade, since Congress passed the Affordable Care Act.

A separate bill expanding Medicaid came closer than ever to making it to a floor vote earlier Thursday when the Senate Regulated Industries Committee defeated it on a tie vote.

“This bill does not cover a single uninsured Georgian,” House Minority Whip Sam Park, D-Lawrenceville, said during the floor debate on the CON bill.

Leah Chan, director of health justice for the Georgia Budget and Policy Institute, said the failure of Medicaid expansion leaves Georgians with incomes too high to qualify for Medicaid under the current law but unable to afford to pay for health insurance without coverage.

“You can build as many health-care facilities as you want, but we still have 295,000 patients living in the coverage gap,” she said.

Rep. Mark Newton, R-Augusta, turned that argument on its head in defending the CON bill.

“Without (additional health-care) facilities, an (insurance) card in your pocket won’t do much good,” he said.

The bill’s supporters also argued the new state commission on health care will provide an opportunity to continue discussing Medicaid expansion.

“This is not the end of the road for us,” said Rep. Lee Hawkins, R-Gainesville, chairman of the House Health Committee. “We’re going to keep at it.”