What happened to CON reform this year?

Sine Die, the Latin term used to indicate the legislature’s adjournment, often evokes certain images: Rep. Denmark Groover hanging from the clock in the state House in a vain attempt to keep it from turning to midnight, bills becoming “Christmas trees” in a final attempt to carry other legislative priorities, and bleary-eyed lawmakers voting on bills they haven’t had time to read. 

Yet, even with those historical caveats, any hope of reforming the state’s regulatory system for approving new healthcare facilities in 2023 – and I can’t stress the following word enough – appears to be effectively dead with only two legislative days remaining in the session.

Three bills that would have reduced certificate of need (CON) regulations by varying degrees were introduced this year. 

  • Senate Bill 162, sponsored by Sen. Ben Watson, R-Savannah, would have initially replaced the state’s CON system with a licensing process for all healthcare facilities and services with the exception of long-term care. Despite a committee substitute that scaled back repeal and received the support of some of the state’s largest health systems, the bill was never brought up for a vote in the Senate after passing out of committee. 
  • House Bill 606, sponsored by Rep. Sharon Cooper, R-Marietta, would have exempted ambulatory surgery centers with two different surgical specialties from the CON process.  It was never even brought up for a hearing, much less a vote, in the House.  
  • Senate Bill 99, sponsored by Sen. Greg Dolezal, R-Cumming, would allow new hospitals in rural counties from the CON process. It advanced out of the Senate but has not moved in the House.

However, media coverage of this arcane health policy has only increased in recent days. So what gives? How did the desire to build a new hospital in a county of 25,000 people end up with far reaching implications for the state? 

In 2022, a bill was introduced by Rep. Clint Crowe that would allow new hospitals to be built in rural counties (population under 50,000) without a CON. This legislation was intended to provide a pathway for a new hospital in Butts County and areas like it across the state. The community’s existing hospital, Wellstar Sylvan Grove, is a 25-bed critical access hospital that opened in 1962. Community leaders wanted to build a new hospital with at least 100 beds to keep up with anticipated growth along the I-75 corridor south of Atlanta. 

Wellstar did not agree a new facility was needed, and testified that not only would a new hospital in Jackson threaten the solvency of Wellstar Sylvan Grove, but also Wellstar Spalding in nearby Griffin. 

As I wrote at the time, local stakeholders in Butts County decided it was easier to overhaul state law through the legislative process for 120 rural counties than to receive a certificate of need for their community. 

The legislation failed in committee and subsequent attempts to attach it to other bills during the 2022 session were also unsuccessful. 

This year, Dolezal introduced a new version of this legislation, the aforementioned SB 99. During his testimony, Dolezal referenced his home county, Forsyth, which has grown from a sleepy suburb to one of the state’s fastest growing counties. After the bill passed the Senate on a bipartisan vote of 42-13, it made its way to the House Health Committee for two hearings without a vote being taken. 

The State Office of Rural Health produces a map defining the 120 rural counties in Georgia. It has turned into a political rorschach test during these hearings. 

Opponents of the bill distribute the map and say, “Look at all these rural counties that could get new hospitals!” Proponents of the bill distribute the map and say, “Look at all these rural counties that could get new hospitals!”

Every time a bill is discussed in the legislature that would reform or repeal CON, hospital lobbyists talk about the ability of surgery centers or standalone imaging facilities to cherry pick well-insured patients from profitable service lines. Now, short of that line of attack – given this bill would only allow for new hospitals – committee members were able to hear the hospital industry debate the definition of what constitutes a hospital.

Even after the bill sponsor acquiesced to four of their five amendment requests, the hospital associations remained opposed. The fifth amendment that was not added by the bill sponsor was a two-year sunset clause for the bill that left most committee members laughing incredulously at the prospect of new development in such a short timeline.

However, by the time this legislation was introduced, the debate was no longer confined to Georgia’s rural counties, but had expanded to include metro Atlanta and Augusta. 

In 2022, Wellstar closed two hospitals in southern Fulton County: Wellstar Atlanta Medical Center in downtown Atlanta and Wellstar Atlanta Medical Center South in East Point. These closures forced state and local policymakers to question the legitimacy of a system that allows a nonprofit entity the ability to essentially keep competitors out and then close facilities with little notice – despite substantial financial reserves.

In late December 2022, Wellstar and Augusta University Health System announced plans to enter into a partnership. This was seemingly motivated by the financial difficulties experienced by the state-operated AU Health System which has reported operating losses in the tens of millions in their most recent financial disclosures. 

Which leads us to the reports that have emerged from the last week.

Reportedly the passage of SB 99 would jeopardize the proposed Wellstar-AU deal.

Reportedly the Lt. Governor’s family would financially benefit from the new hospital site in Butts County. 

Reportedly the failure to pass SB 99 will result in a legislative shutdown. 

After all, “No bill is truly dead until the session ends.” Perhaps the second most famous Georgia political maxim after “the legislature’s only requirement is to pass a balanced budget.” Incidentally, the politics of CON have now even seeped into the state budgeting process. 

In the meantime, both legislative chambers have introduced resolutions for a CON study committee after the session concludes. Regardless of how the final week of the legislature plays out, that is how we got here. 

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