NC Senate to consider bill ending certification process for new health care facilities

Yahoo

03-04-2025

Two North Carolina Senate committees have advanced a bill repealing the state's 'certificate of need' law that requires new health care services and facilities go through an approval process to determine their necessity.
Whether the General Assembly passes the bill, known as Senate Bill 370, may ultimately be a moot point. The state courts are currently considering a case that could also bring an end to certificate of need laws in North Carolina at the direction of the state Supreme Court, which in October wrote that the lawsuit's allegations 'could render the Certificate of Need law unconstitutional in all its applications.'
Currently, 35 states require health care providers to complete the certificate of need process before creating certain new offerings. In North Carolina, that process is overseen by the Department of Health and Human Services with the aim of restricting 'unnecessary increases in health care costs' and 'unnecessary health services and facilities based on geographic, demographic and economic consideration.'
The North Carolina Healthcare Association, which represents hospitals, supports the practice, writing in a 2024 policy brief that the program 'ensures that hospitals and health systems maintain the resources to provide high-value care to all.'
Proponents of certificate of need laws say they prevent unnecessary expenses on new medical facilities and services that would be underutilized and whose costs would ultimately be passed down to patients. Opponents say that in practice, the program impedes vital health care expansion and forces patients to shoulder the cost of millions in consulting and legal fees that hospitals pay to navigate the certificate of need process.
Sen. Benton Sawrey (R-Johnston), one of the repeal bill's primary sponsors, criticized the certificate of need process as 'anticompetitive,' arguing that by allowing the market to decide where new facilities and services are necessary, patients will be better off and will be able to pay less for medical services.
'Ironically, a government program originally aimed at reducing health care prices is likely inflating them, at least in some situations,' Sawrey said. 'I think we can be proactive about this decision, but it requires a willingness to have that discussion rather than fall back time and again on the same entrenched positions that don't work, don't control costs, and don't let innovation occur in North Carolina's healthcare space.'
Sen. Jim Burgin (R-Harnett), a longtime hospital board member, called the change 'long overdue' and said in his experience, the process to receive a certificate of need takes a minimum of two years and $500,000 in legal fees.
'We could do not any cancer treatments in Harnett County up until this past year,' Burgin said. 'We went through the CON process in the years, but it took six years — really eight, if you add the work-up to it — from the time we started talking about it.'
Tim Rogers, CEO of the Association for Home and Hospice Care of North Carolina, said during public comment that his group believes the certificate of need law 'plays a vital role in ensuring the integrity, quality, and accessibility of this vital service.'
'The CON process helps prevent fraud, waste, and abuse by ensuring that new providers entering into North Carolina meet rigorous regulatory and financial standards before entering the market,' Rogers said. 'This screening reduces the risk of bad actors, exploiting Medicare and Medicaid, safeguarding taxpayer dollars while ethical business practices are held.'
Cody Hand, a lobbyist with the North Carolina Radiation Oncology Society, said that linear accelerators, like those Burgin said were held up by the CON process in Harnett County, require such careful review because they emit ionizing radiation and so are classified as nuclear technology.
'They require strict safety protocols that in this state don't exist outside of the CON process,' Hand said. 'The CON process serves as a critical checkpoint in both the safety and the staffing, not necessarily for cost control and not necessarily for planning, but for safety and accountability.'
After passing the Health Care committee Wednesday, the bill received a favorable recommendation from the Senate Rules Committee Thursday morning. It has not yet been scheduled for a vote on the Senate floor.