North Carolina Senate considers bill to loosen Certificate of Need requirements
(The Center Square) – The North Carolina Senate is considering a bill that would loosen regulatory requirements for health care facilities.
The current version of Senate Bill 462 increases the dollar amount that diagnostic center equipment, major medical equipment and capital expenses for health facilities must exceed before they are required to obtain a Certificate of Need (CON) review. It also sets a deadline for construction for CON holders.
North Carolina’s CON law “prohibits health care providers from acquiring, replacing, or adding to their facilities and equipment, except in specified circumstances, without the prior approval of the Department of Health and Human Services,” the state agency’s website reads. It also is required ahead of certain medical services.
“The law restricts unnecessary increases in health care costs and limits unnecessary health services and facilities based on geographic, demographic and economic considerations,” the North Carolina Department of Health and Human Services (NCDHHS) also said.
Critics of CON laws believe they reduce access to health care and result in price inflation.
According to the National Conference of State Legislatures, price inflation can occur when a hospital cannot fill its beds and fixed costs must be met through higher charges for the beds that are used.
Research gathered by the John Locke Foundation shows CON laws are associated with 30% fewer hospitals per capita, 13% fewer hospital beds, 14% longer emergency room wait times and 3% higher spending. Fifteen states have repealed CON laws since the federal government repealed it in the 1980s, research also showed.
Current law requires a CON review for diagnostic centers with equipment worth between $10,000 to $500,000. Under SB 462, the threshold would increase to $1.5 million. The requirement would be applied to facilities with major medical equipment worth $2 million instead of $750,000. Other capital expenses would need to exceed $4 million instead of $2 million.
The new amounts would be adjusted each year based on inflation, starting Sept. 30, 2022.
SB 462 requires CON holders to start construction on projects that cost more than $50 million within four years of the CON becoming final. For projects less than $50 million, CON holders would have two years to start construction.
If the bill passes, it will take effect Oct. 1. SB 462 received initial approval from the Senate Committee on Health Care on Wednesday. Changes are expected to be made to the bill in the Senate Committee on Rules and Operations of the Senate next week.
The measure was introduced by Sens. Joyce Krawiec, R-Forsyth; Jim Perry, R-Lenior; and Jim Burgin, R-Harnett.
SB 462 must be approved by a full vote in the Senate and the House before being sent to Gov. Roy Cooper for final consideration.
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