Certificate of Need — NC House Committee Prepares to Act

On Thursday, after months of meetings, a House Select Committee charged with examining the current Certificate of Need (CON) system met to begin finalizing recommendations for legislative changes to the law.  NCMS has been closely monitoring the actions of the committee. CON is the tool used by the state to limit the development of healthcare facilities and access to diagnostic equipment. The stated purposes of the CON law can be found at NCGS §131E-175.

The proposals listed below are likely to be acted on at the final meeting of the committee in December.

State Health Coordinating Council (SHCC) – recommendations include moving the SHCC one step closer to ethics requirements as requested by the NCMS more than a year ago.  At that time, Gov. Perdue issued an executive order to outline ethics requirements of the SHCC, but those did not go as far as the NCMS requested.  In addition, the committee’s proposed changes split the appointments of SHCC members between the executive and legislative branches.  Currently, the Governor has sole appointment authority.

Threshold changes – The committee is recommending a number of threshold increases or repeals that primarily affect facilities and incumbent certificate holders.  The changes are predicted to lower the number of applications that would have to be reviewed by the Division of Health Services Regulation (DHSR). The majority of the threshold changes apply to project based applications.  Facilities would be allowed to replace existing equipment, and make improvements under higher thresholds without applying for a new certificate.  The threshold changes do not address the current disparate treatment of physician practices when compared to other facilities.  The cumulative value requirement on diagnostic centers and physician practices would have to be eliminated to address that issue.

Additional Study – The committee found that it would be useful to continue to study the CON system, but the committee’s charge expires at the end of the year.  Recommendations will include the possibility of creating a new committee or requesting a standing committee to take on the responsibility of continuing the examination of CON.

A full list of the House Select Committee’s proposals can be found here.

The NCMS position on any changes to the CON system has remained unchanged since adoption in 1999.  NCMS policy adopted by the House of Delegates reads as follows:

RESOLVED, That the North Carolina Medical Society supports a fair and transparent CON process that includes the thorough evaluation and consideration of the following factors in any application for a CON to provide regulated health care services:

1.  the availability of health care services to all patients;

2.  timely access to needed health care services and treatments;

3.  the harm caused to patients when health care treatments are unduly delayed;

4.  the additional expense incurred by patients and society when access to services is restricted;

5.  the accountability of the applicant for the delivery of quality care and continuous performance improvement; and

6.  the clinical appropriateness of the setting for the proposed services;and be it further

RESOLVED, That the North Carolina Medical Society supports operational, administrative, and legislative changes to assure that all applicants for certificates of need are treated equitably; and be it further

RESOLVED, That the North Carolina Medical Society supports measures that ensure physician interests are appropriately represented before the Department of Health and Human Services, including the development of the State Medical Facilities Plan and the administration of the Certificate of Need program.

(Report N-1999, adopted 11/14/99)
(revised, Report R-2006, Item 41, adopted 10/29/2006)
(revised, Report I-2009, Item 10, adopted 11/01/2009)

The NCMS will continue to monitor this committee and advocate for fairness in the system as defined above.  The House Select Committee on Certificate of Need has a website that can be found here.  All agendas, presentation handouts and reports are complied on that page.  You can find a list of the committee members here.


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