Industry Pulse: Georgia could be the next HRE boom state, as lawmakers plan to examine CON law

In other states that have dropped, or dramatically lessened the effects of, their Certificate of Need (CON) laws, the development of hospitals, MOBs and other types of healthcare facilities has increased dramatically. One such state is Florida, where healthcare projects have soared since the state repealed significant portions of its CON law in 2019.

Now, lawmakers in Florida’s neighbor to the north, Georgia, have decided to put the state’s CON law “under the microscope” this summer, during the legislature’s off-season.

During the state’s legislative session earlier this year, Lt. Gov. Burt Jones (R) introduced a bill that would have exempted most rural hospitals from the CON process. After his bill passed in the Senate on a 42-13 vote, it stalled out in the House – it does, however, remain alive for next year’s session, which begins in January 2024.

A recent article in the Georgia Recorder notes that Georgia’s current CON law “controls the number of healthcare services in a geographic area by requiring healthcare providers that want to open or expand to show there is a demand for more services. A rival provider can challenge an application if they are within 35 miles of the proposed project.”

Those who support the CON law say the program protects “fragile rural hospitals from start-ups that might pop up and poach patients seeking profitable services.” Critics, however, say the “antiquated system … limits access to care and hasn’t stopped rural hospitals from closing their doors.”

According to the Georgia Recorder article, the head of the Senate panel,  Republican Sen. Greg Dolezal of Cumming, Ga., said he hopes the group will end its work with “different ideas than we walked in the room with.” House Speaker Jon Burns, a Republican from Newton, said he instructed the House committee to “follow the facts.”

Currently, lawmakers are looking at a variety of possibilities, ranging from a full repeal to reducing or repealing some of the rules or “narrow exceptions for facilities like new birth centers, greater hospital accountability rules and more funding for cash-strapped rural hospitals that could be left more vulnerable.”

Jimmy Lewis, CEO of Cumming-based HomeTown Health, which represents rural hospitals, said during a House panel meeting that “one of the simple ways to produce cash is to adopt Medicaid expansion… I understand all of the politics associated with it, but the simple fact of the matter is if this could pick up 500,000 people, or so, for coverage on a payer mix that is 6 to 10 percent underpaid right now, that is a major, major program to produce cash. You say, ‘What does that have to do with CON?’ Well, this is where we get money to continue to provide the services.”

The article notes that Georgia is one of 10 states that has not fully expanded Medicaid under the Affordable Care Act (ACA). Meanwhile, when it comes to possibly repealing, or at least changing the CON law, the Georgia Recorder reported that a woman “who has been blocked from opening a birth center in Augusta made the case Tuesday for more leeway for new facilities like hers.”

Katie Chubb, owner and founding director of the proposed Augusta Birth Center, submitted a CON application to the state Department of Community Health in the fall of 2021 only to have it denied, partly because she was unable to find a local hospital that would enter into a transfer agreement, as required under the rules. Ms. Chubb has taken the state to court in hopes of having Georgia’s CON law ruled unconstitutional for birthing centers.

“That should not be the only way to solve this problem,” Ms. Chubb said. “There are only three birth centers in the state of Georgia, and there should be many, many more.” The House “modernization” panel’s next meeting is set for Sept. 12 in Albany.

The Senate’s “reform” committee plans to meet next on Aug. 28 in Columbus.