Breakthrough: Legislature approves CON changes, Medicaid funding plan, hospital transparency

In a whirlwind of activity on health care bills, the General Assembly on Friday approved substantial changes to the state’s certificate-of-need system and the renewal of a Medicaid funding mechanism.

The CON provisions in House Bill 186 will allow Cancer Treatment Centers of America a pathway to expand the capacity of its Newnan facility and treat more Georgia patients.

And in a separate bill, the House and then the Senate agreed to renew the hospital provider fee that fills a nearly $1 billion hole in the state Medicaid budget. House Bill 321 also contains strong financial disclosure requirements for nonprofit hospitals. It passed the House 107-61. The Senate agreed to that version later Friday by a 50-2 vote.

The logjam over both bills was apparently broken early Friday when both Gov. Brian Kemp and major hospital systems Piedmont, WellStar and Grady wrote letters early Friday urging passage of the two proposals.

A letter from Piedmont Healthcare, which has 11 hospitals in Georgia, said that it “strongly supports increased transparency among all health care providers.’’

“Any representation that the hospital community opposes HB 321 does not reflect Piedmont Healthcare’s position or institutional values,’’ said the letter, signed by CEO Kevin Brown and leaders of Piedmont hospitals.

The provider fee and transparency bill passed the Senate on Thursday but ran into a roadblock later in the House. The Georgia Hospital Association had opposed language related to transparency.

The transparency provisions will require nonprofit hospitals to publicly report a range of financial data. Besides their IRS 990 forms, these hospitals would have to disclose their audited financial statements, including those of their affiliates; their ownership in businesses, subsidiaries and captive insurance companies; the salaries and benefits of their 10 highest paid administrators; terms of their debt and properties owned; and their community benefit report and patient debt collection practices.

The CON process governs the construction and expansion of health care facilities and regulates what kinds of services they can offer. A provider must obtain a state “certificate of need” for any major project. Critics say the system in its current form has discouraged competition in the Georgia health care industry.

In the past, hospital groups have vigorously opposed changes to CON, saying it protects financially vulnerable hospitals and preserves their ability to take care of indigent patients.

State Sen. Matt Brass (R-Newnan), who sponsored a CON bill in the Senate, said that “in order for us to have real CON reform, the transparency reforms were crucial.’’

Brass said hospitals’ letters of support, along with that of Kemp, pushed House Bill 321 over the finish line.

“Most of our hospitals aren’t going to have anything to hide,’’ Brass told GHN. “Some of the bad actors are about to be exposed.’’

The CON vehicle, House Bill 186, would limit the rival health care entities that can object to a CON application to those within a 35-mile radius of the proposed project. Currently there are no geographic restrictions on who can object.


Other provisions include increasing financial thresholds for hospital construction and medical equipment; and prohibiting hospitals from purchasing or holding ‘‘medical use’’ rights of properties.

The Kemp administration says White House officials have indicated they would be more receptive to a waiver request on Georgia health insurance rules if the state would take action on CON reforms.

The CTCA proposal had been defeated in past General Assembly sessions.

Cancer Treatment Centers of America

The Georgia Legislature in 2008 allowed CTCA, a national chain, to build its hospital for the Southeastern states in Newnan, and the facility was granted an exemption from the CON process as a “destination’’ cancer hospital. But legislators also set restrictions on the hospital, requiring that it have no more than 50 beds, and that no more than 35 percent of its patients come from Georgia. Those restrictions are in line to be removed under House Bill 186.

Rep. Matt Hatchett, a Dublin Republican who has helped spearhead the CON reform push, said the House votes are “the beginning of small steps to improve access to health care and the affordability of health care. Over time, I think it will reduce costs for everyone.’’

Nonprofit hospitals don’t pay taxes on their property and income, Hatchett said. In exchange for that privilege, he said, they should provide information about their assets and community benefit.

Ethan James, a Georgia Hospital Association executive, said after the votes that his organization had some concerns about the duplication of existing financial reporting requirements that the new legislation could produce.

On the CON bill, James said, “We worked very hard to come up with a reasonable compromise on the modernization to certain elements of CON.’’


The GHA compromise on CTCA, he said, “enables them to serve their community.’’

Sen. Chuck Hufstetler, a Rome Republican, told GHN that the General Assembly “got something done [on CON] this year. We’ve done some good things here.”

Also Friday, the state Senate approved a bill that would allow the distribution and sale of medical marijuana in Georgia.

House Bill 324 would allow distribution of the drug through as many as 28 dispensaries statewide. And it would allow four growing licenses for the state. The bill now returns to the House of Representatives, which passed a more expansive version that would have allowed up to 60 dispensaries and 10 growing licenses, the AJC reported.

And the Senate late Thursday approved a bill that would protect tenants from retaliation by a landlord if they file a complaint about unhealthy living conditions, such as mold or rodent infestations.

“It’s the right thing to do – people should not be retaliated against,’’ state Sen. Jesse Stone (R-Waynesboro) told lawmakers Thursday about House Bill 346. He also noted that the state’s many honest landlords are different from the “slumlords’’ who provide unhealthy housing.

The bill would help maintain “decent housing for the citizens of Georgia,” Stone said. (Here’s a GHN article on the tenant protection bill)