Dueling legislation seeks to ease rules on new hospitals

The debate hinges on certain exemptions. Senate Republicans want to allow more free-standing outpatient care facilities where patients can undergo minor surgical procedures without going to a hospital.

“The big issue that we continue to worry about is access to medical care. Our focus in recent years has been on rural health care,” said Sen. Bill Cowsert, a Republican from Athens who sponsored the legislation in his chamber. “What do we have to do to get new hospitals closer to our people in rural areas of the state?”

However, advocates for rural and nonprofit hospitals say these kinds of facilities, also known as ambulatory surgical centers or ASCs, can cherry-pick wealthier patients because they are not required to treat all patients regardless of their ability to pay. And because ASCs can provide high-dollar procedures such as imaging, lab work and surgeries, they would also siphon off revenue from hospitals, making the hospitals responsible for treating all uninsured patients with more expensive emergency services.

To open a new hospital in Georgia under current law, hospitals must demonstrate a significant need for care in their area through a process known as certificate of need, or CON. The rules were established in 1974 to comply with a federal mandate requiring states to regulate new medical facilities to help control the costs of government reimbursements for Medicaid and Medicare.

That mandate ended in 1986, and some states have since repealed or amended their CON rules.

Since at least the mid-2000s, Georgia lawmakers have discussed changes to CON rules. The conversation has lingered for so long without a fix in part because the issue crosses party lines: Several lawmakers, Democrats and Republicans, represent rural areas that may only have one hospital in each county, if that, and shift their attitude depending on what level of care is available within their districts. Those rural hospitals, which may also be among the largest employers in a lawmaker’s district, would be strongly impacted by CON changes.

The House version of HB 1339, sponsored by state Rep. Butch Parrish, a Republican from rural Swainsboro in east Georgia, did not allow the free-standing outpatient surgical facilities to avoid the CON process. Instead, the House version focuses on allowing more rural hospitals to open so long as they meet certain criteria, including providing instruction for medical residency students and psychiatric care.

Rather than deregulation, Democrats in the House and Senate say the state should expand Medicaid, the government health insurance program for low-income people. They said that would make a bigger difference in hospitals’ ability to stay open and expressed disappointment and frustration that the topic has again been pushed back. Georgia is one of just 10 states that have not accepted federal funding to expand Medicaid.

“As someone who believes that CON reform is needed and that we should be significantly reforming the CON framework, I also believe that CON reform alone will not solve our health care issues in Georgia,” said Sen. Jason Esteves, a Democrat from Atlanta.

Senate Minority Leader Gloria Butler, a Democrat from Stone Mountain, said Thursday that she would vote to support the legislation to give members of the conference committee, who will work out changes on the bill between chambers, “one more chance to do the right thing and finally pass Medicaid expansion.”

Republicans have no plans to expand Medicaid this year, relegating the topic to a study commission to review access to health care for low-income and uninsured people.

Anna Adams, executive vice president for external affairs at the Georgia Hospital Association, said Medicaid expansion would help many hospitals in Georgia, although it wouldn’t address financial concerns for every hospital.

“From the perspective of the hospital, an insured patient is a healthier patient,” she said, because “an insured patient will seek the right care at the right place at the right time.” For example, insured patients are more likely to go to a primary care physician for preventive care, rather than waiting to go to an emergency room when they experience a medical crisis.

Monty Veazey, president of the Georgia Alliance of Community Hospitals, said expanding Medicaid would transform many uninsured patients into paying patients, giving hospitals “a lot more cash flow to work with.”

In addition, the Senate’s changes to the bill would allow physician groups of different specialties, such as orthopedic surgery and cardiac surgery, to share operating rooms, effectively though not officially creating multispecialty ASCs. The hospitals could lose more and more patients, especially those paying with insurance, if they can go to multispecialty facilities.

Veazey said he is concerned that the Senate’s bill would cut down on what percentage ASCs must be owned by physicians, allowing more private equity firms, which “cut back on overhead and jack up prices,” to buy up these facilities.

“It would be the wild west and create devastating negative financial impacts for hospitals,” he said. “For any hospitals, especially rural ones, they will not be able to survive.”

Veazey said he is also worried about the ability of ASCs to handle medical emergencies. If something goes wrong when a physician is performing a hip or knee surgery, they would have to call 911 to get the patient treated.

That’s a bad deal for hospitals, Veazey said, because in that scenario, hospitals lose out on the moneymaking surgery but are still responsible for the emergency care.

While Gov. Brian Kemp said he won’t stop Medicaid expansion conversations, he also won’t encourage them.

“That was a legislative priority, mainly of the House, to put that out there and have some conversations,” he said. “I was never in favor of doing that last year or this year.”

Kemp is standing behind his program, Georgia Pathways to Coverage, which launched last year. It expanded Medicaid eligibility for low-income people who work at least 80 hours per month or perform certain specified activities. However, the program has so far attracted fewer than 3,000 people out of an estimated 370,000 eligible for the program.

In response to Democrats’ complaints about lack of Medicaid expansion provisions in the amended legislation, Cowsert urged lawmakers to be patient.

“Don’t make a protest vote and slow down the process ... because you’re unhappy with the fact we haven’t expanded Medicaid yet,” he said.

Lt. Gov. Burt Jones applauded the passage of the bill, saying in a statement that the legislation would “ensure that every Georgian, regardless of where they live, would have an opportunity to access quality care in their community.”