Sweeping changes proposed for Georgia hospitals — meant to increase facilities

In this file photo the dome of the Georgia State Capitol stands between tree branches in Atlanta.
In this file photo the dome of the Georgia State Capitol stands between tree branches in Atlanta. AP

The authors of new bills in Georgia’s legislature say a decades-old state licensing law for new hospitals and certain new medical facilities keep patients further from care than they could be.

So the two Republicans have just filed a rework of the tight system of state review required before anyone can open a new hospital, expand a hospital or open facilities including ambulatory surgery centers.

The House version of the nearly 100-page bill also adds a fiscal provision that has to originate on their side: setting aside $100 million in tax credits for donations to struggling rural hospitals, up from $60 million set aside for that now.

But the sponsors are liable to face a lot of questions, and probably outright opposition, from supporters of today’s certification system. Supporters see today’s system as protecting patient health and safety and as a key part of shoring up the finances of hospitals that serve many uninsured and under-insured patients.

State Sen. Matt Brass, R-Newnan, has filed one of the new bills.

The re-work should keep rural patients closer to home for treatment instead of seeing them funneled toward Atlanta, Brass said.

He also thinks it would increase competition, and patients would feel that in their wallets.

“We do think costs should start to come down,” said Brass.

The plan would unfold differently inside and outside metro Atlanta, but underlying it is a replacement of the state’s “certificate of need” system — under which folks who want to build certain kinds of new health care centers, or build or expand a hospital, have to prove to the state that there’s a “need” for such a place. The state would still have regulations on patient health and safety, but the so-called “CON” system would go.

Outside of metro Atlanta, existing hospitals would still be able to object to certain kinds of new centers that apply to open within 10 miles. The state might, or might not, uphold objections.

Inside metro Atlanta, there would be no right to object to new centers.

Everywhere, hospitals would be able to add new services inside existing buildings, without asking permission.

“It still provides licensing, protection, to your rural hospitals, but I think it’s a step in the right direction,” said state Rep. Matt Hatchett, R-Dublin, author of the House version of the bill.

Hatchett and Brass aren’t competing — creating two legislative vehicles is a tactic meant to increase the chance of success. And there are other bills in the Legislature that would poke holes in CON, though none are as broad as the Hatchett and Brass bills.

However, CON is a very sensitive topic. The message often sent by rural hospitals to the state capitol is that they need protection via some form of CON.

The Georgia Hospital Association, a trade group of more than 170 members, was still reviewing the bill as of Thursday afternoon, said Executive Vice President Ethan James.

But repeal of CON is something James said the organization would fight. The CON system, he said, protects all patients, “not just the best-insured or the least acute.”

Hospitals depend on money from things like outpatient surgery to underwrite things that don’t make money, like emergency rooms.

James said that the the bills “recognize the importance” of the rural hospital tax credit by raising it to $100 million, but that that doesn’t overcome objections to the repeal of CON.

New centers or hospitals would need to take Medicaid insurance, and provide care to people regardless of ability to pay, in the same proportion that comparable centers take on indigent care. Alternately, those providers could pay a fee or fine into an existing trust fund that helps underwrite rural hospitals.

Both bill authors expect a lot of hearings about their bills over the coming weeks of the legislative session. CON alone is complex. Their bills also include that tax credit expansion, plus tweaks to how it’s administered. And there are clear new requirements that non-profit, publicly-owned hospitals disclose the salaries of their highest-paid, non-physician staff. So that’s three aspects of health care within one bill.

This CON rework also intersects with another possible big change in health care policy in Georgia. Newly elected Gov. Brian Kemp has proposed researching a Medicaid “waiver:” a way for Georgia and the federal government to spend money to insure more low-income Georgians, but under rules that would be devised by the state itself.

“In order to get the waivers, some CON reforms are going to need to take place,” Brass said.

Legislative reporter Maggie Lee began covering the state Capitol in Atlanta for The Telegraph in 2011.