Committee to Consider Reforming NC Certificate of Need Law

September 15, 2011

Last week, North Carolina Speaker of the House Thom Tillis appointed Rep. Fred Steen (Rowan) and Rep. John Torbett (Gaston) to lead the new House Select Committee on Certificate of Need (CON) and Hospital Related Issues. This committee was recently formed to examine North Carolina’s CON laws. In particular, the committee will be reviewing the transparency and fairness of the current process. Advocates on both sides of the CON issues have long debated the law’s impact on cost and supply of healthcare as well as overall competition among providers in the state.

This is a significant development for all healthcare providers who do business in North Carolina. For years, critics of the CON law have called for an overhaul or elimination of the existing requirements. Proponents have taken the position that limiting supply can help control healthcare costs and protect quality.

A few of the key substantive areas under review are:

  1. The legal requirements and process governing Department of Health and Human Services (DHHS) determinations on applications for CON, including an analysis of exceptions granted to academic medical centers (i.e., Policy AC-3). Academic services have historically been exempt from CON requirements.
  2. Issues relating to publicly owned hospitals, including determining the appropriate role of state-owned hospitals and the appropriate manner for public hospital authorities created under G.S. 131E-17 to operate beyond the boundaries of the local government that created the authority, i.e., local hospital authorities.
  3. Whether a hospital operating under a certificate of public advantage (COPA) should be required to comply with the same rules, policies and limitations in each of the 13 counties in which it operates.
  4. The extent to which a publicly owned hospital should engage in business with an entity having a certificate of public advantage or operating under an exemption under the CON laws of the state.
  5. Any other matter reasonably related to the items above, in the discretion of the committee.

The other members of the committee are as follows: Rep. Martha Alexander (Mecklenburg), Rep. Marilyn Avila (Wake), Rep. James Boles Jr. (Moore), Rep. Marcus Brandon (Guilford), Rep. Jeff Collins (Nash), Rep. William A. Current Sr. (Gaston), Rep. Rick Glazier (Cumberland), Rep. Mark Hollo (Alexander, Catawba) and Rep. Shirley Randleman (Wilkes).

You can view a copy of the press release from Rep. Torbett detailing the appointments to the committee here.

McGuireWoods Consulting will be tracking this issue very closely over the next 18 months. If you are interested in learning more about how our team of legislative affairs professionals can help you stay in front of these ongoing developments, please contact one of the authors.