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Stakeholders ask for fix to CON laws, not repeal at public hearing

JEFFERSON CITY, Mo. — One Missouri lawmaker to looking to follow the lead of more than a dozen other states and eliminate the certificate of need program. Though scores of witnesses argued against the move, asking for reform instead of repeal.

The House Committee on Downsizing State Government held a public hearing late Wednesday night — testimony started at nearly 9 p.m and almost lasted for two hours — on Rep. Jason Chipman’s HB 433.

No one testified in favor of the bill and 13 testified against the measure. The one thing everyone agreed on was that the CON law isn’t perfect and does have some issues. But Chipman split from the stakeholders on how to solve those issues.

The Steelville lawmaker sees completely repealing the law as the solution while an overhaul of the system is the answer to health care officials, hospital representatives, care facility owners, and others in the industry.

The mission of Missouri’s CON law is to “achieve the highest level of health for Missourians through cost containment, reasonable access, and public accountability.” The program was established in the Show-Me State in 1980, motivated by federal law as part of the Health Planning and Resource Development Act of 1974. The federal law was repealed less than two decades later but states were free to continue their programs.

“Going all the way back to the Bush administration — the Bush administration, the Obama administration, and the Trump Administration — have all asked states to get rid of their certificate of need program because there are real concerns through the Federal Trade Commission about antitrust violations as well as Department of Justice because of corruption when the federal act was still in place,” said Chipman.

He went on to argue that CON laws limit competition and choice while driving up healthcare prices and offer few incentives to providers to improve quality. Chipman said that the free market would correct itself.

The current status of too many nursing facility beds in the state was an example that the volunteer Missouri Health Facilities Review Committee, which oversees the CON program, wasn’t working, according to Chipman.

“Why does the committee continue to approve just about everything? What is the point of having them if they are just going to approve everything anyways?” asked Chipman. “Talking about promoting smart growth but why is it so over bedded? So, the committee’s not really doing it.”

But according to stakeholders in the healthcare industry, Chipman’s argument does not reflect the realities of the industry and does not stand to why the law needs to be repealed instead of fixed.

“This industry is not subject to free market principles,” said Mike Levitt, the vice president and chief compliance officer for Tutera Senior Living & Health Care who was served as president of the Missouri Board of Nursing Home Administrators.

Stakeholder’s pointed to the fact that rates for the majority of patients were set by the state and the facilities themselves don’t get to determine their own pricing in a majority of the cases. Nursing home facilities’ Medicaid and Medicare rates are set when they are established.

Nikki Strong, the Executive Director of the Missouri Health Care Association, testified the set rates for some facilities are $19 per day underfunded. That prevents them from updating and investing in their facility.

“We are the most heavily regulated industry in the country,” said Strong.

She noted that facilities can’t cut costs any more than they already have because they will be issued fines which they can’t afford. The only reason some care facilities are staying afloat, according to Strong, is that the owners are using capital from other ventures as funding.

Care homes are also facing a shortage of qualified staff. When a new facility is built, they are poaching staff from the existing facilities in the community. One person testified that when a new facility came into his area, nine key managers of his staff left because the new facility at the current set rate could afford to pay them better.

“We are not running gas stations, we are not selling hot dogs, we are not a Quick Trip. We are in the most regulated business in this country and [free market] principles do not apply,” said Levitt.

Responding to an inquiry by Rep. Tony Lovasco, Levitt used gas station attendants as an example.

In states that previously required gas stations to hire attendants to pump gas changed the regulations, so those gas stations stopped having attendants then the customer would just pump their own gas. But in care facilities, the family of the customer — a person who needs some level of care — isn’t going to come in and take care of that person when there isn’t a nurse to do the job.

Stakeholders also pointed to the current surplus of skilled nursing facility beds across the state as an example. On average, SNF beds have a 70 percent occupancy rate. The reason for over bedding is a multifaceted and part of the problem has been corrected.

Not only are folks staying home longer due to the at-home nursing care boom but approved projects that didn’t get built and automatic increases exacerbated the issue.

The Missouri Health Facilities Review Committee has gotten more strict in the last couple years on continuing extensions and the General Assembly made changes to the regulation regarding automatic increases during the 2018 session.

Another witness testified that four of the top 10 states with the most expensive states have repealed their CON laws — only 15 states don’t have a CON program.

Over and over those testifying on the bill asked for fixes to the law and not a repeal.

“CON process is broken. It needs to be reformed, we don’t think the state is in a position to repeal it,” said Paul Ogier, Chief Finance Officer for Lutheran Senior Services.