Sen. Douglas wants new certificate-of-need task force; NKY’s Rep. Proctor files bills to reform CONs

By Sarah Ladd
Kentucky Lantern

Telling a Senate committee Wednesday that “we should not rush” the state’s policy conversations about certificate of need, a central Kentucky lawmaker presented his resolution seeking to reestablish a task force to examine the issue.

Sen. Donald Douglas, R-Nicholasville, presented his resolution to the Senate Standing Committee on Health Services. He filed it on Jan. 4 with the goal of  considering reforms and submitting findings by Dec. 1.

Sen. Donald Douglas (LRC photo)

After studying the issue for several months in 2023, Douglas explained to his colleagues, “we felt that wholesale changes in certificate of need could, and likely would, fundamentally change how we provide health care here in the Commonwealth of Kentucky.”

He added: “If not done in a strategic and a well thought out way,” such widespread changes “could exacerbate the problems in a health care system that is already struggling to recruit and retain competent health care professionals.”

Sen. Shelley Funke Frommeyer, R-Alexandria, who championed freestanding birth centers last session, said she’d like to include patients themselves in the CON conversation.

“I don’t know that we’ve taken enough time to really walk in the shoes of what our patients are experiencing,” she said.

Douglas agreed, but said the challenge with that is patients usually have a view of the health care system that only includes their experiences. In other words, they see a “smaller picture.”

“They don’t look at the health care system from their neighbor’s view,” he said. “They don’t look at how … it’s going to affect their neighbor or the person down the road or the person in another city.”

It’s unclear who will be on the 2024 task force.

“My concern … is continuing to bring more people into this space does not necessarily increase the depth of knowledge of the subject of the people who are on the task force,” he said.

Meanwhile, a Republican representative filed three bills in the House on Tuesday that seek to reform CON law in Kentucky, including paving the way for freestanding birth centers in the state.

Saying that Kentuckians should have options when it comes to where they get their medical care, Northern Kentucky Rep. Marianne Proctor, R-Union, filed three bills Tuesday aimed at reforming the state’s certificate of need (CON) requirements.

The bills would increase health care expenditures minimums, remove some services like freestanding birthing centers and mental health services from CON requirements, and keep dominant providers from suing new applicants during the CON process, among other things.

Sen. Shelley Frommeyer (LRC photo)

Proctor broke her legislation into these three bills to, she said, keep them simpler for both the public and lawmakers:

• The first bill says facilities spending less than $10 million on a project – a new building, expanded bed capacity – would not need to obtain a CON. This bill also allows for the purchase of medical equipment without a CON up to $5 million.

• A second bill, which Proctor said some may find “ a little bit more…controversial,” would repeal the CON requirement from some services. Those include psychiatric hospitals, physical rehabilitation hospitals, chemical dependency programs, hospice, freestanding hemodialysis units, freestanding birthing centers and more.

• The third and final of Proctor’s bills would keep “dominant providers” from suing CON applicants during the review process.

This bill “doesn’t change the process at all, it doesn’t take away any of the rights of the dominant provider, it just prevents them from suing along the way,” Proctor said.

To address “significant mental health crises, significant overdoses (and) drug abuse” facing the state now, Proctor wants to find a way to get more facilities in the state that can take discharged patients facing mental health issues or needing drug-related treatments.

“What I’m hearing from hospital discharges, they have nowhere to discharge their patients to. There is nowhere to go,” Proctor told the Lantern. “So if we loosen up the certificate of need, perhaps more of those facilities could be there.”

Rep. Marianne Proctor (LRC photo)

The certificate of need requirement mandates regulatory mechanisms for approving major capital expenditures and projects for certain health care facilities, according to the National Conference of State Legislatures. 
Some proponents of keeping CON in place have said that if hospitals lost private pay patients, serving only people on government insurance would force them to close services or altogether.

Proctor sees that as an “invalid argument.”

“Creating more access — isn’t that what we want to do, is to give people more accessibility to give them more options, more choices?”

Sometimes called the “competitor’s veto,” certificate of need laws were in effect in 35 states and Washington D.C. as of December 2021.

Proctor said her bills “addressed a lot of concerns that my colleagues had” about CON and they are meant to “address the eminent risks that we face right now.”

She did not work with the Kentucky Hospital Association on the bills, she said. KHA representatives spoke at multiple committee hearings in 2023 and have opposed removing CON from freestanding birth centers, for example.

The KHA has not yet responded to the Lantern’s request for comment.

Sarah Ladd is the Kentucky Lantern’s health reporter. 

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