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Recommendations to modernize certificate of need headed to Md. legislature

Randolph Sergent led the task force that put together the certificate of need modernization report. (File photo)

Randolph Sergent led the task force that put together the certificate of need modernization report. (File photo)

The Maryland Health Care Commission advanced to the state legislature Thursday a set of 14 recommendations to modernize Maryland’s 40-year-old certificate of need process for health care facilities.

The Senate Finance and House Health and Government Operations committees had requested the recommendations from the commission to look at potential ways to modernize the process that governs hospitals, nursing homes, home health agencies, rehabilitation facilities, addiction treatment centers and more.

Commission member Randolph Sergent, a vice president and assistant general counsel at CareFirst BlueCross BlueShield, led the task force set up by the commission to look at ways that could be addressed both by the commission within its regulatory authority or which would require statutory changes by the legislature. The commission also included a set of areas that warranted further study.

The report included recommendations on how the process could be updated to align with the state’s new Total Cost of Care Model, set to begin next year.

While the task force found more support for keeping certificate of need regulation than eliminating it entirely, feelings about the current certificate of need process are a mixed bag.

Supporters of the system see benefits that include reducing overcapacity, improving equitable access to care, boosting access to appropriate care and reducing fraud. They also see its limits on growth and new market entry as a benefit to protect expensive investments in facilities, the report found.

But the certificate of need system also carries a heavy regulatory burden. It can be expensive and time-consuming for health care facilities to go through the process, including the cost of lawyers and consultants.

Health care commission staff also take the time to make sure that certificate of need applications have been sufficiently completed, including details about how the new facility would follow the state health plan. That process can go through several cycles and must be completed before an application can be formally docketed.

That completeness review has come under scrutiny by facilities for its length; some stakeholders called the process excessive. Many applications ultimately take more than a year to complete.

The current certificate of need process has six review criteria: an application must be consistent with the state health plan, demonstrate need, survey the availability of more cost-effective alternatives, assess the viability of the proposal, comply with conditions of previous certificates of need and assess the impact it would have on existing providers and the health care delivery system.

The task force recommendations would eliminate the need to consider the costs and effectiveness of alternatives to the project and compliance with the terms and conditions of previous certificates the applicant has received.

But other stakeholders worry that reducing some of the burdens of the certificate of need process could reduce the process’s role as a “gatekeeper,” keeping bad actors out of the state.

Any recommendations by the commission would take time to be considered and potentially implemented. For example, while the commission can rework aspects of the state health plan on its own, a rewrite can take commission staff nine to 12 months. And legislation can take multiple sessions to build a consensus before it can pass.

“MHCC should be focused on modernization and recognize some reforms will require time,” the report said. “Success or failure won’t be determined in twelve months, but let’s begin in 2019.”

The legislature could consider these recommendations during the 2019 session. But the Maryland Hospital Association also plans to bring up certificate of need modernization on its own.

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