A 40-something-year-old health care regulation meant to control costs that may actually do the opposite is a likely legislative target for Tennessee's General Assembly in 2020.
It's been four years since the state's controversial certificate of need — commonly called CON — law underwent major changes. A certificate of need is a permit that health care organizations in Tennessee must obtain from the state before building, operating or offering one of 26 regulated facilities, technologies and services. Some of those include hospitals, nursing homes, burn units, hospice and open-heart surgery.
A group of lawmakers interested in reforming Tennessee's CON program have been meeting, studying — and scratching their heads — around the process for more than six months. One of the many complex questions they face is whether small tweaks or a sweeping overhaul could help or harm a fragile health care system in which 12 rural hospitals have closed since 2013.
During a November meeting in Nashville, state Rep. Kevin Vaughan, R-Memphis, said the program has become a "whipping boy" for health care system problems.
"If we're analyzing the reduction of CON, that's a prescription that we're going to write," Vaughan said. "We have to determine what it is we want to treat because the elimination of CON may not fix what we want."
Other health care issues and topics TN legislators plan to tackle in 2020:
*Association health plans
*Pharmacy benefit manager reform
Sources: Speaker Cameron Sexton, Sen. Bo Watson, Rep. Robin Smith
Currently, 36 states and Washington, D.C., operate a certificate of need program, and those programs vary widely, according to the National Conference of State Legislatures website. Proponents of the programs argue they're needed to ensure orderly growth and limit health care spending, because health care is unlike other goods and services. Opponents believe removing the cumbersome regulation will free the health care industry, bringing more providers into the market to drive competition and lower costs.
State Sen. Bo Watson, R-Hixson, who has led the workgroup as its senior member, said the mission has been to look beyond certificates of need in order to remove barriers and maximize access to the health care system. In the past, he said, lawmakers did a poor job tying CON changes with the goals of the State Health Plan.
The group has relied on data, stakeholder input, expert testimonies and their past experience wrestling with the law as they weigh options for changes. Some of the more popular ideas for fixes center around lowering the cost of obtaining a certificate.
Application fees range from a minimum $15,000 to maximum of $95,000, depending on the scope of the project. The state agency that oversees certificates of need — the Health Service and Development Agency — uses those funds to operate. But outside costs can skyrocket due to attorneys' fees and the political nature of the process. Large, incumbent health care institutions are notorious for using CONs to block competitors from the market.
"I feel confident that the work group is going to bring legislation that addresses the CON process with the objective of streamlining the process and reducing cost," Watson said. "What I'm not sure about is if we're going to address a specific service and/or specific equipment."
Contact Elizabeth Fite at firstname.lastname@example.org or 423-757-6673.