Georgia House Votes Down Certificate of Need Bill

House Bill 198, proposed this year to amend Georgia’s Certificate of Need (“CON”) laws, has failed to garner the necessary votes in the House, missing the crucial Crossover Day deadline needed to pass the legislation. In general, bills that fail to pass one side of the General Assembly before Crossover Day are considered “dead.”

The aim of Georgia’s CON program (and CON programs in general) is to reduce healthcare costs by preventing excess capacity that results from the over-development of health care facilities and services. When, for example, a hospital cannot fill its beds, the belief is that the fixed costs will be met through higher charges for the beds that are used. Opponents of CON, however, argue that the CON program prevents competition that would otherwise lead to reduced healthcare prices.

Over a decade has passed since Georgia’s CON program underwent significant amendment, and although amendments often pop up each legislative session, this year the legislature had particularly targeted the laws for revamp, urging lobbying groups to accept that changes would be coming.

House Bill 198, as originally proposed, would have repealed the CON laws except for long-term care facilities. In its place would have been a special health care license (and an exemption process) for limited facilities and clinical health services. The initial proposal would have eliminated certain services, including diagnostic imaging, from the scope of CON and the permit process altogether. This initial version of the bill received favorably approval from the House Special Committee on Access to Quality Health Care.

Although the House committee initially approved the bill, it was later withdrawn and replaced with a scaled-back bill that would have amended portions, but retained the general CON framework. Provisions of the substitute bill included:

• Giving Cancer Treatment Centers of America (CTCA) a pathway to add more beds and serve more Georgia patients at its Newnan hospital
• Removing mental health and substance abuse facilities from CON
• Allowing cardiology ambulatory surgery centers
• Increasing thresholds dollar amounts for CON review for medical equipment and capital expenditures
• Permitting a sports medicine center to be built in Alpharetta
• Requiring transparency for nonprofit hospitals’ financial holdings
• Increasing indigent care requirements
• Allowing freestanding emergency departments owned by hospitals

The bill also would have added disclosure requirements for hospitals, and narrowed the opportunity for parties to oppose projects.

Ultimately, the substitute bill failed to garner enough votes needed to pass before Crossover Day. There is still some opportunity for revival before the end of the Legislative Session, so this (and other proposed CON legislation) will bear continued monitoring.