Already considered a business-friendly state, Florida seems ready to cut CON regulation
Saying they want to promote competition and make the regulatory market less complex, Florida officials are pushing Certifi cate of Need (CON) reform in this session of the state’s legislature.
The move is not a surprise to national health planning experts, who believe Florida already has a business-friendly approach to health care development. A 2000 National Directory of Health Planning Policy and Regulatory Agencies chart ranks Florida 25th in the nation in terms of breadth of CON regulation. The same chart ranks Maine as the state with the most regulation and Louisiana as the state with the least.
Florida lawmakers have filed two bills on behalf of the Agency for Health Care Administration (AHCA), which administers the state’s CON program. With Republicans at the helm in both the executive and legislative branch in Florida, insiders predict success for the proposal. The state’s 60-day session began March 7.
Filing fees for CON projects in Florida range from $5,000 to $22,000. AHCA predicts that removing some projects from CON regulation and easing regulation for others would save providers $400,000 annually in fees. While the agency projects the proposal would reduce litigation because fewer projects would remain in the competitive bid cycle, the state does not say how much money would be saved.
The bills propose exempting from competitive review the construction of up to 10 new hospital beds for facilities with 80% occupancy for the services they seek to expand. Facilities seeking to expand beds for tertiary or long-term care services still would be required to go through a competitive review.
A similar exemption would be made for nursing homes. Facilities would be allowed up to 10 new community beds so long as they have a 96% occupancy rate for the community beds they seek to expand. Only nursing homes that have been identified as high quality — or Gold Seal — would be eligible for the exemptions.
The bills also propose to simplify the conversion of mental health beds to acute beds. Other reforms pushed by AHCA include taking services that currently are subject to minimal CON regulation and removing them from state CON review altogether. Examples of those include cost overruns, obstetrical services, and outpatient services.
The agency reviewed 212 projects totaling $712 million in capital expenditures in 1998, the most current year for which data are available. Of those projects reviewed, 96 were hospital-based, 89 were nursing home-based, and 27 were other types of projects.
While hospital and nursing home lobbyists don’t foresee themselves blocking the state’s proposals, the administration already has had to make concessions to the hospice industry. In its original draft, AHCA proposed allowing hospice service to begin with minimal CON regulation — little more than a letter asking for perfunctory approval from the state. It has agreed to shelve that move until 2003.
Hospice providers were opposed to the move toward deregulation. Hospice itself is not a lucrative business, says Florida Hospice and Palliative Inc. lobbyist Cam Fentriss. However, hospices, required by law to be not-for-profit, are worthwhile ventures because they can create significant dollars through donations, she says. The state’s 39 licensed hospices raised $30 million in donations in 1999, she says.
Hospice should not be opened to the free market influences, says Ms. Fentriss. "It incorporates health care and all the other things people need when death is at the doorstep." She notes that the volunteers help families with such mundane things as paying the bills as well as the more complex issues of dealing with Social Security. If hospice is perceived as a political "sacred cow," it has earned such special status with consistently excellent care, she says.
CON changes in Florida still could be sidetracked by another issue — a debate on physician regulation. Florida’s hospital associations want the state to switch its focus from facilities to health care services, a net wide enough to bring in physician care. The state’s three hospital associations filed suit against a Florida Board of Medicine (BOM) rule that would have allowed physicians to operate on patients for eight hours and house them up to 24 hours for recovery. The hospitals withdrew their suit after the BOM acquiesced.
Ralph Glatfelter, the president of the Florida League of Health Systems, which represents Florida’s for-profit hospitals, says he would like to have seen the issue of physician regulation included in the CON bill. But inclusion "would have made it much more controversial than it already is." The for-profit hospitals, though, are firm in their opposition. "What I say to the seasonal argument is get a CON," he says. "That’s what my hospitals did."
Contact Mr. Glatfelter at (850) 224-9407, Ms. Fentriss at (850) 222-2772, a representative of the American Health Planning Associa tion at 573-751-6403, and the Flor ida Agency for Health Care Adminis tration at (850) 922-5871.
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