ELIMINATING THE CERTIFICATE OF NEED PROGRAM

House Bill 4013

2022 Session

Introduced: January 24, 2022

Lead Sponsor: Summers

Co-Sponsors: Tully, Dean, Kimes, Crouse, Barrett, Conley, Horst, Jeffries, J., Hamrick, Pritt

Brief Description: This bill will repeal §9-5-19 of the Code of West Virginia to eliminate the certificate of need program for health services. 

 

FAQ

WHAT IS A CERTIFICATE OF NEED?

A certificate of need (or "CON") is a regulated permit that allows new healthcare services and facilities to be started.

WHO IS IN CHARGE OF THOSE?

Usually a state health department is in charge of the certificate of need. In WV, it is managed by the WV Healthcare Authority.

HOW DID THEY START?

In 1974, the National Health Planning and Resources Development Act was passed. The theory was that health care markets were not like other industries that respond to competition by lowering prices.  It discouraged inflation of healthcare, and pressured states to implement CON programs to continue receiving certain federal funding. 

The goal was to: control health costs, prevent oversaturation of healthcare, improve efficiency, ensure services were not duplicated and competing, and control unnecessary spending. 

The effort didn't work as well as they had hoped, and in 1986 the federal requirements were rolled back. 35 states (including WV) still have them in place today.

WHAT DO THEY INCLUDE?

The CON review includes:

  • determination of need

  • financial feasibility

  • quality and accessibility

  • consistency with the State Health Plan

There is a period of public comment. Per the WV Healthcare Authority, it is used to "encourage accountability by providing an avenue for public comment, discourage or limit unnecessary services, and promote community planning".

WHY SHOULD WE REPEAL IT?

The certificate is often expensive to obtain and very time consuming.
It can sometimes monopolize local health care.
It can limit access to health care services.

WHY DO THEY STILL EXIST?

In some cases, states have just been slow in the legislative process. 
Larger health systems tend to benefit from CON programs because it stops competition from moving into the area. These systems tend to have more power and influence.

HOW ARE THEY HARMFUL?

There have been studies comparing states that have CON with those who do not. 

States that still have a CON:

  • have lower quality of healthcare

  • have higher cost of healthcare

  • have less access to healthcare

CAN I HAVE AN EXAMPLE OF THIS?

If a midwife wanted to start a birth center in WV, they would need to apply for a certificate of need. The midwife would have to prove:

  • the area it would be in has enough volume

  • that the service is not already available

  • that it would lower cost of healthcare and improve outcomes

  • that it would be sustainable

The process would be costly (thousands of dollars) and could take several years. 

It would go up for public comment and review. If a larger health system was in the area and viewed it as competition, they could stop the birth center from opening by listing it as a "duplication of service" in the interest of "community planning".