Gov. Tate Reeves has vetoed a bill aimed at reforming Mississippi’s certificate of need laws.
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.
In Mississippi, after efforts to expand Medicaid failed last year, lawmakers in the Republican-supermajority legislature eyed CON reform as a means of bridging a major healthcare coverage gap and serving those in rural areas.
House Bill 569, authored by House Public Health and Human Services Committee Chairman Sam Creekmore, R-New Albany, did not eliminate these regulations, but reformed them. The legislation doubled the capital expenditure, or spending on a project that is not typically considered a normal operating expense, for clinical and nonclinical services, along with medical equipment.
For clinical health services, the threshold has been raised from $5 million to $10 million. For nonclinical health services, the threshold was upped from $10 million to $20 million, and major medical expenses were defined as exceeding $3 million rather than the current $1.5 million threshold.
The legislation also directed the State Health Department to assess the feasibility of exempting small hospitals from having to go through the CON process for dialysis centers, something Creekmore promoted ahead of the legislative session. The bill also served to make additional CON reforms, aiming to lessen regulations on hospitals in Mississippi.
Though Gov. Reeves has long advocated for the elimination of CON laws, much less watering them down, he ultimately decided to veto the bill due to an “11th-hour” amendment made by Senate Public Health and Welfare Committee Chairman Hob Bryan, D-Amory, in late March.
“Unfortunately, due to an 11th-hour floor amendment added in the MS Senate, my duty to faithfully adhere to the MS Constitution and the US Constitution requires me to veto this bill in its current form,” Reeves wrote on X. “Specifically, the amendment added by Public Health Chairman Hob Bryan (Democrat- Amory) is not simply bad public policy, but it violates the doctrine of separation of powers.”
The governor went on to interject that the addition to the legislation requires a specific hospital within a particular city to undergo the CON process. Creekmore clarified to Magnolia Tribune that the amendment surrounded ongoing litigation between Merit Health and St. Dominic’s Hospital in Jackson.
Texas-based Oceans Healthcare opened a behavioral hospital where St. Dominic’s Hospital’s mental health division used to reside in Jackson. The Mississippi State Department of Health approved a lease agreement between Oceans and St. Dominic’s for inpatient and outpatient behavioral health services. Merit Health, another local medical provider, objected and filed a lawsuit.
While the State Health Department determined that St. Dominic’s and Oceans did not need to go through the CON process to finalize their agreement, Merit officials disagreed and took to the courts to block the behavioral hospital from coming to fruition. In response, Senator Bryan inserted the following amendment, which was adopted by his colleagues, to HB 569:
“The State Department of Health shall issue a certificate of need to any psychiatric hospital located in Jackson, Mississippi, which was providing adult psychiatric services as of January 1, 2025, under a certificate of need which was transferred to them within the past five years; which new certificate of need shall authorize the same services as the existing certificate of need, provided that the hospital relinquish its existing certificate of need effective as of the date that the new certificate of need takes effect.”
Reeves, citing his obligation to follow the state and U.S. Constitution, noted that he was not comfortable enacting a bill that would interfere with the judicial process. The Republican governor further asserted that if CON laws, albeit watered down in this case, are going to exist under his leadership, they are going to be applied equally across the board.
“Moreover, the legality of the transfer of the very CON that is subject to the last-minute Senate floor amendment is being adjudicated and is currently pending before the MS Supreme Court,” Reeves wrote. “I make no judgment here as to the merits of that case, as I believe it is the role of neither the Chief Executive nor the legislature (through this amendment) to finally resolve this dispute.”
With a special session looming to finalize a state budget, Reeves will have the opportunity to add CON reform to his agenda for the extended stint at the capitol. He has expressed a willingness to etch his signature onto HB 569 if Bryan’s amendment is merely deleted. A special session date has not yet been set.