Kemp Backs Bid For Certificate-Of-Need Changes, Gets House Panel OK On Waiver Plan

Gov. Brian Kemp has thrown his support behind major reforms of the state health care regulatory system, acting as legislation on the contentious issue was revived in a Senate committee Wednesday.

A House bill to make sweeping changes to the certificate-of-need (CON) system recently failed to pass the House on Crossover Day. That normally means a piece of legislation is dead for the year.

The CON overhaul effort was revived in a hearing Wednesday, when some provisions of the unsuccessful bill were attached to different House legislation, and the new bill was adopted by the Senate Finance Committee.

However, the provisions in the new CON bill are considered weaker than those in the original House measure.

CON regulates how health care facilities function in Georgia. A provider must get a “certificate of need” from the state to proceed with a major project, such as building or expanding a medical facility or changing what services are available to patients. The system is controversial within the Georgia health care industry and has sparked fireworks in previous legislative sessions.

Until now, Kemp had stayed on the sidelines during the often acrimonious CON debate. But in his statement Wednesday, Kemp said, “As governor, I am committed to pursuing free-market solutions that lower health care costs, eliminate barriers to access, and improve quality of care in every region of  our state. To reach these goals, I firmly believe that we need meaningful reform of Georgia’s certificate-of-need laws and regulations. We must be bold. The time is now.

“I applaud the House Rural Development Council’s hard work over the past several months. If the Legislature does not adopt common-sense reforms, I will explore executive action to put patients – not the status quo – first.”

The Kemp administration says White House officials have indicated they would be more receptive to a waiver request on Georgia health insurance rules if the state would take action on CON reforms.

Georgia’s proposed waiver bill, Senate Bill 106, passed a special House health care access committee Wednesday and appears on track to become law. (See more on this hearing below.)

The Trump administration has urged states to scale back their certificate-of-need laws.

New Bill Omits Some Key Proposals

Leading hospital groups in Georgia have fought hard against a broad CON revamp, saying it would hurt existing hospitals, including those in rural Georgia. Proponents say it would spark competition, increase access to services and reduce health care costs.

House proponents of CON changes have maintained that their effort still can prevail, though there are just a few days left in the General Assembly session. The final day is scheduled to be April 2.

The newly reworked House Bill 186 contains some proposals from the original House Bill 198. It would limit the rival health care entities that can object to a CON application to those within a 35-mile radius of the proposed project. Currently there are no geographic restrictions on who can object.

Other provisions include:

• Giving Cancer Treatment Centers of America (CTCA) a pathway to add more beds and serve more Georgia patients at its Newnan hospital
• Increasing financial thresholds for hospital construction and medical equipment
• Prohibiting hospitals from purchasing or holding ‘’medical use’’ rights of properties

But the amended bill does not contain any provision allowing a sports medicine and training center in Alpharetta, a project that has many high-profile backers in the sports world. And the bill would not let hospital organizations establish standalone ERs or allow for cardiology ambulatory surgery centers.

The new bill significantly weakens the financial disclosures that the original House bill urged.

State Rep. Matt Hatchett, R-Dublin, the lead sponsor of the stronger House bill that was defeated, said Wednesday that ‘we’re trending in the right direction.’’

But he called the new bill’s elimination of the sports medicine center provision “disappointing,’’ along with the weaker financial disclosures, especially on the holdings of nonprofit hospitals.

The Kemp waiver bill passed the House committee by a 10-3 vote after more than an hour of public testimony.

“This is a very important issue,’’ said panel Chairman Richard Smith, a Columbus Republican, at the outset of the hearing.

The legislation has two parts. One waiver would pertain to adding people to the Medicaid rolls. The other would allow Georgia to revise the set-up of the state health insurance exchange, created by the Affordable Care Act for people who don’t have government or employer coverage.

Dispute About Coverage Numbers

Sen. Blake Tillery, R-Vidalia, lead sponsor of the waiver bill, said the legislation “could have far-reaching effects for health care in Georgia.’’

The insurance exchange changes, he said, “could drive down the cost of health insurance for those who buy it on the private market.’’

The bill, though, has created a debate over cost and coverage. The federal government, up to now, has not approved a Medicaid waiver as envisioned by SB 106 — adding people at up to 100 percent of the federal poverty level, roughly $12,500 for an individual, to the program, at the Medicaid expansion reimbursement match.

In states that choose full Medicaid expansion, covering people up to 138 percent of the federal poverty rate, the federal government has pledged to provide 90 percent of the cost for the newly eligible members.

So at 100 percent of poverty, the state presumably would be in line for its regular Medicaid match, which in Georgia would be 67 percent, unless the Trump administration grants an exception for the 90 percent match. Federal health officials said recently that they were reconsidering the matching rate for states wanting the 100 percent of poverty threshold.

Tillery said those above the poverty level are already eligible for subsidies in the health insurance exchange.

Based on other states’ experience, the insurance exchange waiver could lead to a reinsurance program that has the potential to stabilize premiums for individuals. But Democrats said the exchange waiver could spark the proliferation of health plans that don’t have the same pre-existing condition protections as the ACA provides.

Atlanta-based Grady Health System, Macon-based Navicent Health, the Georgia Hospital Association and HomeTown Health, an association of rural hospitals, all testified in favor of the legislation. The proposal can help Georgia design health care solutions to meet the state’s health care needs, said Matt Hicks, a Grady executive.

Several consumer groups testified in favor of raising the income limit to 138 percent of poverty.

People between 100 percent of poverty and 138 percent would have to pay more out of pocket under the exchange versus having Medicaid coverage, said Laura Harker of the Georgia Budget and Policy Institute.

Laura Colbert of the consumer group Georgians for a Healthy Future added, “we are very excited this conversation is moving forward.’’ But she added that 200,000 uninsured Georgians would not gain Medicaid if the coverage cutoff is 100 percent of poverty.

State Rep. Debbie Buckner, D-Junction City, who is not on the committee, testified about a proposal that would amend the bill to create a PeachCare for Adults program, likening it to the current PeachCare for Kids.

The coverage would be based on Medicaid, and fees would vary by income, Buckner said.  It could also address the state’s high maternal mortality rate by extending coverage to women for a year after childbirth. Buckner said the program would also help rural hospitals stay open.

The waiver bill’s 100 percent ceiling for Medicaid coverage is problematic, Buckner said.

Before the vote, Rep. Patty Bentley, D-Butler, a committee member, gave emotional testimony about caregiving for her husband, who has a spinal cord injury.

“I struggle every day to give my husband the quality care he needs,’’ Bentley said. The proposal, she added, ‘‘may not be a perfect bill, but it’s what we have on the table right now.’’

Another committee member, Rep. Butch Parrish, a Swainsboro Republican, said the legislation is “a step in the right direction’’ to improve access to health care in Georgia.

Andy Miller is editor and CEO of Georgia Health News