Lawmakers want to make it easier for medical facilities to add in-demand health care services by loosening provisions in a law that requires health facilities to seek state approval first.
The time-consuming and sometimes costly application process, which requires facilities to seek a “certificate of need” for health care planning purposes, can stifle needed services, especially in rural areas, according to health officials.
House Public Health and Human Services Chair Sam Creekmore, R-New Albany, said he plans to author a bill that would eliminate state approval requirements for hospital dialysis programs, substance abuse treatment centers and psychiatric care facilities in Mississippi. It would raise the capital expenditure threshold, or the maximum amount hospitals can spend on capital improvements without approval, by 50%.
“That’s a common sense bill that would help Mississippians,” he said.
Certificate of need law is a familiar target for legislative reform in Mississippi, but few substantial changes have been made to the law since 2016. A select committee convened by Speaker of the House Jason White and co-chaired by Creekmore met twice since August to explore possibilities for tweaking the law.
Certificate of need laws aim to lower costs and improve the quality and accessibility of health care by preventing duplication of services, but stakeholders are divided on whether or not the law accomplishes its goals.
Critics argue the law stifles competition and fails to decrease costs. Advocates say it ensures that communities have access to a range of health services, not only those that are profitable.
“Opponents of CON say, ‘We need more competition to bring health care costs down,’” said Creekmore. “Well, that’s clearly not the case. We’re already the lowest. We need to encourage more hospitals to add more services in these rural areas.”
Mississippi hospitals have some of the lowest costs in the country. Inpatient stays cost $1,425 per day on average in 2022 – less than half of the national average – according to data from KFF.
When hospitals do not have their own in-house dialysis facilities, patients in need of dialysis must be transferred to facilities that do. This can be inconvenient for patients and sometimes harmful to their health, said Creekmore.
Without certificate of need requirements, hospitals could open dialysis centers without first seeking approval from the state.
Certificate of need applications are often contested and it can take months or years to be approved to provide a new service or open a new health care facility. The appeals process can also be expensive.
“Particularly in our rural hospitals, it would allow them to keep the patient local, where they’re close to their friends and their family and their church members, and they won’t have to be transferred to a larger hospital in Jackson or somewhere else,” said Richard Roberson, president and CEO of the Mississippi Hospital Association.
Most rural counties in the United States do not have a dialysis facility.
Restrictions on purchasing new equipment and making improvements to buildings have also become a barrier for hospitals aiming to expand their services, especially as construction and hospital supply costs have increased since the pandemic, said Creekmore.
The Legislature last raised capital expenditure limits in 2016 to $5 million and $10 million for clinical and non-clinical health services, respectively, and capped new major medical equipment purchases at $1.5 million. The thresholds are adjusted for inflation as determined by the Mississippi Department of Health.
A higher cap will make it easier for hospitals to purchase needed medical equipment and complete renovations but also encourage health centers to keep costs low, Creekmore said.
Psychiatric and substance abuse treatment could also benefit from removing certificate of need requirements, he said.
“Psychiatric care is something we can get done that would easily provide people with better and more care for mental health,” he said. “Substance abuse facilities need to come out of CON.”
State Health Officer Dr. Daniel Edney on Aug. 19 said the state needs more behavioral health treatment capacity in the state.
“We’re desperate for mental health beds,” he said. “We have folks wanting to move into the mental health space and CON and the process has driven them away.”
A bill to remove psychiatric and substance abuse treatment from certificate of need requirements passed the House of Representatives last year but died in conference.
Roberson said he supports removing substance abuse and chemical dependency beds from the certificate of need process to allow hospitals more flexibility when treating patients.
The hospital association will focus primarily on dialysis and capital expenditure limits in its push for certificate of need reform this year, he said.
Creekmore said he is also considering a separate bill that would require any party that unsuccessfully appeals a certificate of need application to pay the original applicants’ legal fees.
This would prevent long, costly appeals that prevent or stall new health services from opening in Mississippi.
“There are legitimate reasons to challenge some (certificate of need applications), but some people challenge … to delay the process,” said Creekmore.
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