Georgia hospital groups open to a few CON changes; critics say more needed

ATLANTA — As Georgia lawmakers push to revamp healthcare regulations, two major hospital groups have proposed some revisions to the state certificate-of-need system.

Those proposals stemmed from months of hospital officials’ discussions on CON, which the industry has defended for years in the General Assembly. The hospital recommendations fall short of the CON reforms two legislative committees have recently formulated.

Given that difference, this year’s General Assembly session is shaping up to see a bruising battle over state regulations.

Sen. Ben Watson, R-Savannah, who led a Senate study committee on certificate of need, told Georgia Health News on Monday that “unfortunately, they (hospitals) are playing politics as they have since 2008,’’ when a CON package was passed by the legislature. Rep. Terry England, R-Auburn, co-chair of a House panel that has studied CON, said he had not reviewed the hospital proposal in depth, but added, “What I have seen of it disappoints me. I didn’t see any innovative ideas jumping off the page at me.’’

The industry ideas for changes were recently put forward by the Georgia Hospital Association and the Georgia Alliance of Community Hospitals. Both groups have defended the current CON system, which requires a “certificate of need” from state officials for significant healthcare construction projects to go forward.

“CON laws help promote quality of care, limit unnecessary expenditures, and ensure access to care to all in need regardless of their ability to pay,’’ the hospital groups said.

The proposed changes are:

— Re-establishment of the Health Strategies Council or a similar body to evaluate healthcare resources and regulations;

— Increased capital expenditure thresholds for some construction projects;

— Gradual loosening of restrictions on how many Georgia patients Cancer Treatment Centers of America can accept at its Newnan hospital, provided that CTCA pays ‘‘all penalties and fines’’ over indigent and charity care requirements.

Ray Williams, a CTCA lobbyist, countered Tuesday that “we have no penalties or fines, and never have been on the noncompliance list.” On allowing the gradual increase of Georgia patients, Williams added, “Cancer patients don’t have five years to wait before they get the care they want at CTCA.”

The company has long sought to relax state restrictions on its hospital’s size and the percentage of Georgia patients it can serve. In 2008, the Georgia legislature allowed CTCA to build its Southeastern U.S. facility in Newnan, south of Atlanta, and gave it an exemption from the CON process as a “destination’’ cancer hospital. Legislators also set restrictions on the facility, requiring that it have no more than 50 beds, and that no more than 35 percent of its patients come from Georgia.

Opponents of relaxing the CTCA rules have said the company received a special exemption from the legislature to build the facility, and that it agreed to the limits in the legislation. Many other hospitals in Georgia offer cancer care, GACH and other groups have pointed out.

Certificate of need will be the focus of a new special committee on healthcare access that was created by House Speaker David Ralston, R-Blue Ridge. He also told reporters that he supports the House Rural Development Council’s push to increase transparency and accountability of nonprofit hospitals around their financial holdings and spending.

GHA and GACH, meanwhile, defended their recommendations Tuesday. Ethan James of GHA said Tuesday that their proposal “represents a significant modernization of the certificate-of-need process. We look forward to negotiations with policymakers regarding the state health planning program.”

Monty Veazey, CEO of GACH, said hospitals have worked hard over the last seven months to develop the proposal.

“I feel we have a good plan that most all hospitals, both rural and urban, support,” he said.

The hospitals also said that ‘‘potential compromises will only be supported by the hospital community in exchange for other legislation beneficial to hospitals.’’

Such ideas, the hospitals said, would include legislation on “waiver’’ proposals to extend coverage for the uninsured.

Watson, a physician who is taking over as chairman of the Senate Health and Human Services committee, said waivers were an idea that new Gov. Brian Kemp has discussed, and that he would be willing to look at. He said the overall hospital proposal was “not a big surprise’’ in that it did not go far enough.

The study committee that he headed recommended providing exemptions from CON review for medical equipment purchases and most imaging services, mental health and substance abuse facilities and hospitals adding cardiac services under certain conditions.

It would also allow some multi-specialty doctor groups to operate surgery centers focusing on one specialty, and ease restrictions on the ability of a hospital to expand its bed capacity.

The Senate committee and the House Rural Development Council would help CTCA expand its capacity and serve more Georgia patients at its Newnan hospital. A proposed sports medicine center in Alpharetta would also gain a route to state approval.

The House council also recommended requiring nonprofit hospitals to adhere to indigent and charity care requirements of 7.35 percent of revenues. For-profit hospitals would face a 4.35 percent requirement – a lower amount, England said last month, because they also pay taxes. Hospitals not reaching those required amounts would face a fine.

Metro Atlanta would generally be exempt from licensing scrutiny under the new set-up, except if a building proposal is within 20 miles of a facility in another region, under the Rural Development Council plan. For other areas, a new medical provider would have a construction or medical service proposal reviewed if located within 20 miles of an existing provider, which would be allowed to contest the application.

Nonprofit hospitals would be required to disclose financial information on their websites, including their IRS 990 forms and executive salaries, as well as their community benefit spending, terms of their debt and properties owned, including those that are vacant, under the council plan.

Any subsidiaries of hospital authority-owned hospitals and foundations would be subject to Georgia Open Records Act requirements, under the council proposals. The availability of such records has been the subject of a high-profile legal case involving Northside Hospital.

Jennifer Parks