Certificate of Need reform in North Carolina heads to Cooper
(The Center Square) – Legislation that would loosen certificate of need requirements in North Carolina is on its way to Gov. Roy Cooper’s desk.
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 North Carolina Department of Health and Human Services website reads. It also is required ahead of providing certain medical services.
Current law requires a CON review for diagnostic centers with equipment worth between $10,000 and $500,000. The threshold increases to $1.5 million under SB 462. 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.
“The threshold levels in North Carolina by which you have to get a CON, they have not been changed since the mid-90s,” Rep. Donny Lambeth, R-Forsyth, said. “So, we’ve been about 30 years at the same threshold levels.”
SB 462 also requires CON holders to start construction on projects that cost $50 million or more within four years of the CON becoming final.
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 Fifteen states have repealed CON laws since the federal government repealed it in the 1980s, research also showed.
A recent Journal of General Internal Medicine study linked CON laws to high COVID-19 transmission rates at nursing homes. Lambeth said Tuesday North Carolina’s health care community supports the bill.
SB 462 cleared the House, 100-3, on Tuesday without debate. The Senate approved the measure, 48-1, on May 5. Cooper has 10 days to sign or veto the bill before it automatically becomes law.
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