Connecticut Certificate of Need Bill Advances After Spirited Debate and Some (But Possibly Not All) Amendments

As reported in our last post, the General Assembly’s Joint Committee on Public Health took up Senate Bill No. 795, An Act Establishing the Office of Health Strategy and Improving the Certificate of Need Program. At a packed hearing on March 20, 2017, the Committee heard from nearly 40 interested parties who submitted written statements including hospitals, professional associations, public interest groups and various government officials.  The Bill proposes a host of significant changes to Connecticut’s CON program and was almost gutted as the Committee members narrowly voted down by a 14-12 margin an amendment that would have removed Sections 2 through 14 of the Bill, where the most controversial aspects of the legislation reside.

Ultimately, however, the Committee voted to approve Substitute Bill No. 795 (LCO 5849) by a 16-10 margin on March 27, 2017. The Substitute Bill makes some significant changes to the original Bill, including the following:

  • Cardiac services: The Substitute Bill reinstates the current requirement that a party seek CON approval in order to establish cardiac services such as primary and elective angioplasty and open heart surgery.
  • Reduction of services: Whereas the original Bill required CON approval for hospitals and hospital systems reducing inpatient or outpatient services, the Substitute Bill provides for the submission of a CON determination request to avoid the need to obtain CON approval if the hospital or hospital system can demonstrate that the reduction is due to insufficient patient volume or lack of practitioners to support the effective delivery of care. Reduction is still defined as a 50% or greater decrease in the availability of the services or any reduction in the service area covered by the hospital or hospital system. Like the original Bill, nothing in the Substitute Bill provides guidance as to how “availability” or “service area” will be measured for CON purposes. If the agency charged with administering the CON program, the Office of Health Care Access (OHCA), determines that that the hospital or hospital system cannot demonstrate that the cause of the reduction is due to one of the factors mentioned above, then full CON review will still be required.
  • Cost and market impact review (CMIR): Consistent with current law, the Substitute Bill only subjects to CMIR the transfer of ownership of a hospital if the purchaser has net patient revenue above $1.5 billion or is a for-profit entity. (The original Bill expanded the CMIR to all CON applications involving the transfer of ownership of a hospital or any other health care facility, aside from a large group practice, to a hospital or hospital system.)
  • Relocations: Whereas the original Bill required CON approval for the relocation of any “health care facility,” the Substitute Bill reverts back to allowing for the submission of a CON determination request demonstrating that the population served and payer mix will not substantially change as a result of the relocation. This is essentially the current law, although now the party submitting the CON determination request must also describe the project to which the relocation pertains.  As with present law, if OHCA finds that there would be a substantial change to the population served or payer mix, then CON approval for the relocation would be required.

We will continue to monitor this legislation, which on March 29, 2017, was filed with the Legislative Commissioners’ Office, as it winds its way through the legislative process. For now, word on the street is that the sausage is still being made.

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