December 6, 2022

South Carolina House committee to take on possible elimination of certificate of need program

Nearly three months after it passed the South Carolina Senate, a House committee will take up a bill that could repeal the state’s certificate of need program.

The House will take up S. 290 in an ad hoc committee that will meet on Tuesday afternoon after the full House’s session.

There are just 12 legislative days remaining, but there is optimism that the bill will reach the House floor before the end of session.

Certificate of need laws were mandated by the federal government in 1974 and regulate how many medical facilities are available in an area and what services they provide in an effort to keep costs to consumers lower. Even though Congress later eliminated the CON requirement in 1987, many states retained them.

South Carolina is one of 35 states with a certificate of need program.

Those who argue against the certificate of need laws, however, say they have the opposite affect in how they delay or prevent health care facilities from being built in areas of need as competitors battle new facilities in court.

“CON laws were intended to keep healthcare costs down so that hospitals could afford to provide a significant amount of charity care for the indigent,” said Palmetto Promise Senior Fellow Oran Smith. “But that is not the case anymore. Hospitals are not providing a level of charity care equal to their tax breaks as nonprofits.

“And, a supermajority of peer-reviewed studies shows that CON actually raises costs, restricts access to care and does not improve quality.”

A recent Americans for Prosperity Foundation (AFPF) study shows added costs with the CON process that can lead to delays, added expenses and lengthy court battles.

It took more than a decade of legal battles to get a hospital approved in two South Carolina cases. Construction began earlier this year on Piedmont Medical’s Fort Mill Medical Center after a 15-year legal battle.

“South Carolina has some of the strictest CON regulations,” AFPF State Director Candace Carroll said. “A lot of that has to do with the competitors’ veto that we have in place that holds up projects for years on end.”

Carroll will offer public testimony along with a report from South Carolina Legislative Audit Council, which confirmed last year that it would conduct an audit of CON legislation after 13 South Carolina state senators signed a letter requesting a review.

A recent look at over 100 studies on the topic showed that “10 times as many studies find that CON is associated with higher costs than find it is associated with lower costs,” according to a study from Matthew Mitchell, the Director and Senior Research Fellow at the Equal Liberty Initiative.

“The most egregious aspect of CON is the ‘competitor’s veto,'” Smith said. “If a hospital wants to stop its competitor from building or expanding, CON makes that easy. Just contest it.

“The Roper St. Francis Berkeley hospital was delayed nearly 10 years by CON litigation. Tenet’s proposal for a York County hospital took 15 years to be approved. That kind of system advantages lawyers, not patients.”

House Majority Leader Gary Simrill, R-York, will chair the committee, which includes other members from South Carolina’s House Ways and Means Committee.

This article was originally posted on South Carolina House committee to take on possible elimination of certificate of need program

Sydney Boles