A new committee met at the Capitol this week to discuss changes to state law that requires medical facilities to obtain state approval before providing new or expanded services.
Representatives of health organizations said the law could be strengthened through reforms, but warned against abolishing it entirely.
The law, which requires medical facilities to apply for a “certificate of need,” aims to reduce costs and improve accessibility and quality of health care in the state by avoiding duplication of services.
Critics argue that the law stifles competition in the state’s already sparse health care system and does little to reduce costs. Supporters say it ensures that communities have access to a range of services, not just those that are profitable for providers.
At the national level, the laws have not accomplished much of what they were intended to do, such as improve quality or reduce costs, state health commissioner Dr. Daniel Edney told committee members Monday.
However, the law has been “extremely” successful in preventing health care companies from limiting themselves to offering patients only the most profitable services, he said.
“When we look at the very fragile health care system, particularly in rural areas of the state, cherry-picking can have devastating consequences,” he said. “It can have catastrophic consequences.”
If health centers decide to only offer high-margin services, it could take customers away from hospitals that offer loss-making services, such as inpatient and emergency care, he explained, in both rural and urban areas.
Mississippi’s rural hospitals are struggling to survive. More than half of hospitals are at risk of closure and 64% are facing service cuts. More than half of Mississippi’s residents live in rural areas.
Richard Roberson, president and CEO-elect of the Mississippi Hospital Association, said he thinks it is unlikely that eliminating the certificate of need will incentivize investment in the areas of the state with the greatest need for new health services.
“I suspect that in the areas where there is more commercial insurance, there will be an overproduction of services,” he said. “And when it comes to people coming in and investing money, that’s where they’ll invest it and that’s where they’ll get their money back.”
Governor Tate Reeves advocated for the elimination of certificate of need laws in the state, arguing that it would lead to more competition and the development of innovative health care services.
Last session, a bill sponsored by Senator Angela Burks Hill (R-Picayune) to repeal the state’s certificate of need law was introduced, but it failed in committee.
Bills to repeal or reform the law are commonplace in the state legislature. Last year, more than two dozen bills attempted to change the state’s Certificate of Need law.
In 2016, lawmakers made several changes to the law, including shortening application review periods and increasing capital expenditure thresholds.
States were first required to pass certificate of need laws to receive funding for certain federal programs in 1974. Today, 35 states operate such programs, and 12 have repealed their laws entirely, according to the National Conference of State Legislatures.
Laurin St. Pé, CEO of the nonprofit Singing River Health System, said that without the Certificate of Need law, private equity-backed companies could open health centers near existing hospitals, poaching insured patients.
Hospitals with emergency departments are required by the Emergency Medical Treatment and Labor Act to provide emergency care to patients regardless of their insurance status. These hospitals rely on providing care to insured patients to offset losses from unpaid treatment.
“If they (insured patients) leave, we won’t be able to take care of those who need it most,” he said.
According to KFF data, more than 10 percent of Mississippi residents do not have health insurance.
Responding to a question from House Medicaid Committee Chair Missy McGee (R-Hattiesburg), Edney said expanding Medicaid could offset the risks associated with repealing the Certificate of Need law by reducing the number of people in the state who are uninsured.
McGee was the author of the Medicaid expansion bill that failed earlier this year. Mississippi is one of 10 states that has not expanded Medicaid.
“By closing the coverage gap, more revenue comes into the system to benefit hospitals,” Edney said.
Keith Norman, vice president and chief government affairs officer at Baptist Memorial Health Care, agreed.
“I believe expansion goes hand in hand with this conversation,” he said.
Although Edney and Roberson warned lawmakers about the consequences of repealing the Certificate of Need law, they agreed that the program could be improved through reforms.
Roberson said the ability to provide dialysis services without a certificate of need would reduce the number of patients being transferred to other hospitals. Many small hospitals do not have their own dialysis centers.
He also suggested allowing hospitals to offer home health care, which would reduce the readmission rate. The Centers for Medicare and Medicaid Services penalizes hospitals when the readmission rate exceeds the national average. Hospitals in the Delta have had to pay large penalties for readmissions in the past.
Edney also added mental health and perinatal care to the list of services he believes should not be subject to the review process due to the lack of such care in the state.
The application itself also needs to be reformed to avoid lengthy and costly legal proceedings, Edney said.
Last year, an applicant seeking to provide “much-needed” outpatient care in the Delta – a region of the state with limited health care – withdrew his application after his certificate of need was challenged, saying the hospital did not have the resources to see out a potentially years-long legal battle.
“We are fighting these long and costly battles just to get to the same conclusion,” Edney said.
The state health department approves 95 percent of applications for certificates of need, he said.
Edney also suggested that lawmakers enforce existing proof of need requirements more vigorously, as some health care facilities are failing to meet the commitments made in their applications.
“In the CON world, we lack accountability and transparency,” he said.
Rep. Henry Zuber III, R-Ocean Springs, co-chair of the committee, said the group will examine a number of options for certificate of need reform before drafting a bill. The group will meet again on Sept. 10.
“Everything, everything is on the table,” said Zuber.
— Article courtesy of Gwen Dilworth of Mississippi Today —
