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Lawmakers Fight for Certificate of Need Reform in Missouri and Tennessee

June 4, 2019

Editor’s Note: With legislative sessions winding down in Missouri and Tennessee, three state lawmakers are hopeful their bills have opened the door to reform and eventual repeal of their states’ certificate of need (CON) laws.

In Missouri, H.B. 433, sponsored by Rep. Jason Chipman (R- Steelville), passed through one committee but never reached the House floor. Tennessee is considering two CON reform bills. H.B. 1085, sponsored by Rep. Martin Daniel (R-Knoxville), would eliminate the state’s CON laws over a five-year period with the exception of nursing homes, and H.B. 0075, sponsored by Rep. Cameron Sexton, would address CON in distressed, rural areas. The three lawmakers discussed with Health Care Newsthe challenges they are facing.

Schieber:Rep. Chipman, do you think your bill opened the door for CON repeal in the future?

Chipman:It is a massive change from the status quo, and what it did do was to get the nursing home industry and the hospital industry to finally come to the table and talk about some much-needed reforms.

The bill was hung up in one of the committees, and the chairman was not inclined to move on it even though it passed out of another committee. The vote might have been unanimous. I will introduce it again next year. My bill eliminates whole sections of the statutes.

For a constitutional conservative, it’s kind of fun. I want to keep driving the narrative that this program is inefficient, ineffective, and not needed. There is no guarantee baby step reforms will pass, and until the committee reforms itself out of business, I’m going to continue to file this every year. For something this big, it will take a while to get everyone used to the idea. I’m hoping that is what the reforms will do, but I still want to drive the whole thing into the ground.

Schieber: Rep. Daniel, how did your bill for repeal do this time around?

Daniel: Very well. My bill got out of the House Government Operations Committee [Daniel is chair] and now it’s in the finance committee. It did not move in the Senate, because there is a little bit of resistance over there.

I think we’ll see some reform in 2020. There were at least four bills filed this year that would have reformed the CON process. I think the Senate is starting to realize the people in Tennessee have an appetite for change here. State Sen, Bo Watson will be organizing several study sessions over the summer and fall, and hopefully we can make the case that it is time for reform.

Schieber:Rep. Sexton, your bill would reform CON in distressed areas. How would it improve access to health care?

Sexton: We have 15 economically distressed counties in Tennessee. In those counties, if there is not an emergency room or a surgical center or a particular outpatient diagnostic service, then you can bypass the CON process [if the bill passes]. We think this is a first step. Both bills are parked in committees to hold them for next year so we can tighten down the timeline to get them to the floor as we negotiate.

I think an all-out repeal is harder to do. One of the things Rep. Daniel and I have come to realize is as you start looking at things to do, then you bring more people to the table and they start offering things up. Opponents to CON reform have painted a doom and gloom scenario, and legislators can be sensitive to that. So, you have to show them that is not the case and it may take one, two, or three steps but in the end, I think you can get there because you’re systematically showing them that competition will work.

Schieber: Rep. Chipman, during the hearing on your bill you said opponents were actually making a case for repeal. How so?

Chipman: A banker who finances nursing homes told the committee that his industry scrutinizes projects more closely in states without CON laws. He was there to oppose repeal, but he made the argument that the free market takes care of the problem. The hospital industry stated that CON laws help them negotiate better prices on equipment because CON does not apply under a certain price threshold. Why should a government system be set up to do their bargaining?

Schieber: How do you think CON is holding back growth in your state?

Daniel: We relaxed the laws a few years ago, but certainly if we want to be friendly to business and promote capital investment and access to health care, we need to do more. The hospitals and providers present a scenario of chaos and mass confusion and elderly people being tossed out onto the street, and some of the legislators are very attached to these providers, so they listen to them. But it is something we have to overcome and present a free market that will benefit everybody.

Sexton: You have to spend massive amounts of money just to get into the market, and the problem with CON is it doesn’t allow innovation without government say. We rolled back some of these laws a few years ago, and we have seen great growth and not the doom and gloom the hospitals said we would see.

 

AnneMarie Schieber (amschieber@heartland.org) is managing editor of Health Care News.

Author
AnneMarie Schieber is a research fellow at The Heartland Institute and managing editor of Health Care News, Heartland's monthly newspaper for health care reform.
amschieber@heartland.org @HCPolicy

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