NC Medicaid bill causes stir over changes to how hospitals compete

MM Curator summary

[MM Curator Summary]: NC hospitals want the Medicaid expansion money; they do not want more competition under relaxed CON rules.


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The N.C. Department of Health and Human Services oversees the state’s certificate of need process for health care systems.

TBJ file photo

The North Carolina Senate passed a sweeping health care reform bill last week, and hospitals in the state have mixed feelings about it.

The wide-ranging legislation – known as House Bill 149 or Expanding Access to Healthcare – passed through the Senate nearly unanimously in a final vote Thursday that sends the package to the House. The bill would expand access to Medicaid to an estimated 500,000 North Carolinians, a move supported by the association that represents the state’s health care systems.

“North Carolina hospitals would see a reduction in uncompensated care by closing the coverage gap, which would have a particular impact on our struggling rural hospitals,” the North Carolina Healthcare Association said in a statement. “When hospitals provide care without adequate reimbursement, costs rise for everyone, including for those with insurance.”

But while the association backs this measure, it opposes changes to the state’s certificate of need (CON) law included in the bill. The CON law requires health care providers to receive approval from the state’s Department of Health and Human Services before acquiring, replacing or adding facilities and equipment – such as a new hospital or surgical center.

For instance, last year, UNC Health and Duke Health both submitted plans to add 40 acute care beds in Durham County. State regulators approved UNC’s proposal, and the health care system has since applied to further expand the project, but Duke continues to challenge the proposal.


The new UNC Rex Holly Springs Hospital

UNC Health

The association says the CON approach “right-sized healthcare resources in our state,” while controlling costs and making care accessible. But critics of the law argue that the process inflates heath care prices by limiting competition between providers.

The Senate bill reduces the number of projects that require a certificate of need. This includes removing the CON requirement for chemical dependency treatment facilities, ambulatory surgical facilities and magnetic resonance imaging (MRI) scanners.

A nonprofit called Affordable Healthcare Coalition of North Carolina says many of the reforms in the Senate bill will “increase access to new and better care.” The nonprofit describes itself as a group of businesses, organizations and individuals concerned about the increasing health care and prescription drug costs. Two members of its board of directors work for Blue Cross Blue Shield of North Carolina.

Health care systems and hospitals in the state are “deeply concerned” about modifications to the CON law, according to the statement from the N.C. Healthcare Association.

“Modifying the current CON law would hurt the stability of rural hospitals by carving out elective and outpatient procedures which are the lifeblood of community hospitals, while allowing niche medical organizations without such federal regulation to cater to commercially insured patients,” the association said in its statement.

The association is also opposed to a part of the bill that regulates telehealth. The group said the legislation would make it “harder for providers to care for patients through modern technology.”

In addition to expanding Medicaid and reforming the state’s CON regulations, the bill includes protections against surprise medical billing. The legislation would require that patients receiving care at an in-network facility be informed ahead of time if some services or staff are out of their insurance network.

The legislation would also allow advanced practice registered nurses to provide medical services without a physician to supervise their work. The Affordable Healthcare Coalition of North Carolina says the change wouldn’t allow these nurses to perform services they’re not already performing. Instead, the bill would remove a requirement that these nurses meet with a supervising physician every six months.


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