For those unfamiliar with the concept, certificate of need laws, colloquially known as CON laws, originated at the state level in New York in 1964 and were federally mandated in 1974 to lower healthcare costs and prevent unnecessary duplication of services. The regulations require healthcare providers to seek the government’s approval for certain projects and capital expenditures — money spent to acquire or maintain fixed assets like land, buildings, and equipment.
A bill reforming Mississippi’s certificate of need laws has passed both chambers of the state legislature with unanimous support and awaits a signature from Gov. Tate Reeves.
House Bill 3 follows in the footsteps of a similar piece of legislation sent to the Republican governor’s desk last year before being vetoed. The updated bill removed language that satisfied the provisions of Reeves’ veto, which stemmed from a legal dispute between Texas-based Oceans Healthcare and St. Dominic Hospital.
HB 3, authored by House Public Health and Human Services Committee Chair Sam Creekmore, R-New Albany, amends Mississippi’s CON laws by significantly increasing the amount of money a project would have to cost before the Mississippi State Department of Health would be required to assess and approve or deny the potential expenditure.
“There’s a threshold. If you go by the threshold, you have to get a CON to spend the money, which is, in my opinion, ridiculous,” State Health Officer Dr. Dan Edney said of CON laws. “The Board of Health and the [state health department] recommended to the legislature the elimination of capital expenditure thresholds. They chose to double them, which is a good move.”
Going a step further, the legislation attempts to make the rules fairer for healthcare providers outside of Mississippi’s capital city by limiting the University of Mississippi Medical Center’s CON exemption to the Jackson-area.
Per the bill’s text, if UMMC seeks to make a capital improvement or open a new facility outside of the Jackson area, the Department of Health would have to determine that the expense fulfills a “substantial and meaningful academic function.” MSDH would also be tasked with studying the feasibility of exempting small hospitals from having to go through the CON process for dialysis centers.
CON reform has been eyed as a means of providing relief to rural hospitals in Mississippi, especially as the Republican-led legislature has consistently chosen not to expand Medicaid coverage under the Affordable Care Act. Studies show that 28 rural hospitals in Mississippi are on the brink of closure if finances are not shored up in the near future.
HB 3 is not the only CON-related legislation lawmakers aim to tackle this year. Earlier this week, the HousePublic Health and Human Services Committee passed HB 1622, which lightens regulations on rural hospitals when it comes to making facelifts at existing facilities or opening new ones within a defined boundary. Leadership in the Senate has also expressed an appetite for easing CON regulations for rural hospitals.
“It still has guardrails in place. They’re appropriate. But I think it’s a game-changer for our small rural hospitals,” Edney said of the HB 1622.