Rollback of regulations on new health care facilities gets Senate OK

The Senate on Wednesday approved a rollback of the Certificate of Need regulations that restrict the expansion of new health care facilities.

Posted 10:42 p.m. Jul 23, 2019 — Updated 7:27 p.m. Jul 24, 2019

Travis Fain

, WRAL statehouse reporter, & Matthew Burns, WRAL.com senior producer/politics editor

RALEIGH, N.C. — The Senate on Wednesday approved a rollback of the Certificate of Need regulations that restrict the expansion of new health care facilities.

Federal regulators set up the CON system in the 1970s but later abandoned it because it was creating more problems than it solved, Sen. Joyce Krawiec, R-Forsyth, told colleagues. Most states have followed suit, but North Carolina has held on to CONs, making the state's health care industry the fourth-most-regulated in the nation, she said.

Support for CONs is engrained in the state, as resistance to a complete repeal of the system forced Krawiec and other backers to scale down their proposal.

House Bill 126 has morphed several times this session, and the proposal that got initial Senate approval would do the following:

Raise thresholds for the types of diagnostic center and medical equipment additions that would require state review before a hospital could add them and tie those thresholds to inflation going forward. This would mean less red tape for existing facilities looking to expand.
Have state approvals for new projects expire if construction doesn't begin soon enough. For projects under $50 million, they'd get two years after approval; for larger projects, four years. Any Certificate of Need approval would expire if it's not used for 12 months to keep companies from hording them to stifle competition.
Remove psychiatric facilities and chemical dependency treatment facilities from the CON review process, starting 18 months after the bill becomes law.
Allow specialty ambulatory surgical centers to become multi-specialty centers without a CON review. This would also kick in after 18 months.
Reduce the percentage of charity care beds that institutions that got Dorothea Dix funds are required to maintain from 50 percent to 25 percent.
Three years after the law takes effect, dialysis centers wouldn't need a Certificate of Need approval to open in a county with a population of at least 300,000 people.

The bill now heads back to the House.

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