Published in Health Care

State Legislature considers bills to significantly change health care certificate of need regs

BY Friday, December 06, 2019 11:14am

Michigan’s certification-of-need regulations for health care projects could undergo significant changes under legislation proposed in Lansing.

Among the changes a seven-bill reform package proposes are removing psychiatric beds, cardiac catheterization and air ambulances from CON rules.

James “Chip” Falahee COURTESY PHOTO

The bills would eliminate the $3.3 million threshold above which capital expenditures must undergo CON review, exempt critical-access hospitals in rural markets that are more than 35 miles from another hospital, and expand the commission that oversees the program from 11 to 13 members.

Sen. Curt VanderWall, R-Ludington, the chair of the Senate Health Policy Committee, called the bills “commonsense reforms that will eliminate unnecessary red tape, reduce costs and provide more access to Michigan residents.”

The legislation has been in the works since February, VanderWall said Thursday as the Health Policy Committee began hearings on the bills.

“We have taken our time putting the bills together and have had some great input from many stakeholders over these months that helped to improve these bills before introduction,” he said. “We look forward to some good discussion in the committee and some additional suggestions to further improve these bills.”

CON requires care providers to prove a need to initiate medical service or make a major capital expenditure with an aim of assuring quality and access and avoiding duplication of medical services that drives up costs.

In testimony to the committee, James “Chip” Falahee, chairman of the CON Commission, defended CON and said he welcomes reforms that could make it better.

“The CON process is good. Is it perfect? No. Can appropriate reforms help it? Yes. Are some of these reforms appropriate? Yes. Can some of them be tweaked to make them even better? Yes,” Falahee said.

At Thursday’s committee hearing, the Michigan Manufacturers Association and the Economic Alliance for Michigan both backed CON.

Rising health care costs are a top concern for manufacturers, said Delaney McKinley, senior director of government affairs and membership at the Michigan Manufacturers Association. McKinley cited repeated analyses by the Big Three automakers — General Motors, Ford and Fiat Chrysler Automobiles — that show “consistently and definitively” that their utilization rates and costs are lower in CON states than non-CON states.

The MMA has yet to develop specific positions on the reform bills, although it generally backs CON, McKinley said.

“CON prevents the proliferation of medical procedures and facilities that would result in unwarranted health care costs,” she said. “We strongly support the central tenets of the CON process, but with that being said, we do believe that there’s room for meaningful reform that can enhance the cost savings we’ve seen from this program.”

On specific bills, Falahee cautioned against removing cardiac catheterization from CON, a change that would allow care providers to perform the procedure in an outpatient setting. “Roughly” 2 percent of all cardiac catheterization procedures “can go bad.” When complications occur, patients need immediate emergency open-heart surgery to save their life, he said.

“You don’t want to be that person, because when it goes bad, you need to be wheeled down the hallway immediately to an operating room,” said Falahee, senior vice president for legal and legislative affairs at Bronson Healthcare Group in Kalamazoo. “If you want to move procedures out of a hospital, be careful what the procedures are.”

The Michigan Health & Hospital Association opposed removing cardiac catheterization from CON. The MHA argued in written testimony to the Health Policy Committee that it “could potentially increase the likelihood that patients experiencing major complications during cardiac catheterization do not receive the immediate care they need, leading to higher risk of negative patient outcomes and even mortality.”

Citing patient safety, Blue Cross Blue Shield of Michigan raised the same concern about removing cardiac catheterization from CON.

VanderWall said the bills to remove psychiatric beds from CON could help increase access to mental health care in Michigan “to alleviate any concerns about there being a lack of beds.” The bills would maintain “protection for patients” by requiring psychiatric hospitals to set aside half of their beds for “public patients” served by a local community mental health services program, he said.

“Michigan is experiencing a mental health crisis and this is just the start of the conversation,” VanderWall said.

However, Falahee said mental health access issues in Michigan do not stem from a lack of inpatient bed capacity but rather a shortage of mental health professionals.

“The issue isn’t the beds. It’s the people that staff the beds,” Falahee said. “If we could wave a magic wand of CON or no CON, that doesn’t change the problem.”

Opposition to removing psychiatric beds from CON also came from Grand Rapids-based Pine Rest Christian Mental Health Services.

Al Jansen, corporate director for community and residential services at Pine Rest, told legislators the organization supports improving access to mental health care, although “we think there are other issues standing in the way of access to be looked at first.”

Jansen said occupancy rates for psychiatric beds in Michigan were around 70 percent in 2018, “so that does mean that there are hundreds beds every day that are not being utilized throughout the state.” Pine Rest has an average occupancy rate of 80 percent for inpatient beds.

Staffing shortages “at all levels” are the primary issue in access to mental health care, Jansen said. 

“Access does need to be improved. I think anything that can be done to help that turn around would truly help a large number of citizens of Michigan,” Jansen said.

He called the lack of outpatient mental health care for public patients “almost an epidemic” because the reimbursement rates paid providers is “very low.”

“We think that would be a place to invest,” Jansen said.

Flint-based McLaren Health Care offered support for the bill to exempt psychiatric beds from CON review. 

John McNamara, manager of state government relations McLaren Health, told legislators about a patient in 2018 who had been referred to the ER by a nursing home because he was hurting himself and tried to harm other residents and staff. Once the patient was stabilized, the nursing home would not accept him back because of his history of violence and self-harm, McNamara said.

The patient ended up on a waiting list for a state bed and McLaren finally found a nursing home that accepted him — after he spent 264 days in an ER bed.

“This is not the first time this happened at McLaren and it won’t be the last,” McNamara said. “Addressing the issues surrounding mental health care is large in scope and scale, including access to available beds, provider shortages and reimbursement shortfall. The bill is a step in a larger conversation.”

The bill to expand the CON Commission to include two representatives from the general public was viewed favorably.

VanderWall plans to hold another hearing on the bills next week.

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