Trump Administration Calls For Change To Certificate Of Need Laws

In a recently released 120-page report issued jointly by the U.S. Department of Health and Human Services (“HHS”), the U.S. Department of the Treasury, and the U.S. Department of Labor, the Trump Administration urged states to revisit their certificate of need (“CON”) and scope of practice (“SOP”) laws and regulations. The Administration report argues that government and commercial insurance companies put up barriers to patient care and adversely affect pricing transparency, and it goes on to request that Congress repeal the Affordable Care Act’s (“ACA”) prohibition on physician-owned hospitals.

The Administration’s report takes the position that CONs are anti-competitive, and that the current systems work well for large institutions and powerful interest groups but do little to help provide or improve care, which was the original intent of these programs. Administration officials have laid blame on rising patient costs at the feet of what they say are increasingly consolidated markets, particularly in the realm of hospital purchases of physician practices. As the markets have continued to consolidate, this leaves fewer but larger players fighting for CONs, often making it impossible for smaller entities to gain any traction. The Administration’s goal is to get states to consider repealing CON laws and regulations, but at a minimum the Administration wants states to block competitors of providers who want to enter the market from having any input on their CON applications.

The report goes on to argue that SOP laws and regulations can do much of the same harm that CON laws can – namely, limit competition and increase costs. The report recommends that states broaden their SOP statutes to allow all healthcare providers to practice to the top of their license and utilize their full skill set, reducing overlap of provider coverage areas. The Administration also floats the idea that states and the federal government should consider legislative and administrative proposals to allow non-physician providers to be paid directly for their services where evidence supports that the provider can safely and effectively provide that care. Also, the report recommends that states consider eliminating the requirements for rigid collaborative practice and supervision agreements between physicians and their care extenders that are not justified by legitimate health and safety concerns.

As the current Administration pushes for these ideas and recommendations, it is important to remain cognizant of any potential changes in the laws or regulations that affect your business or profession. If you have any questions on current or proposed CON or SOP laws or regulations, contact an experienced healthcare regulatory attorney.