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1 CERTIFICATE OF NEED REGULATION A NATIONAL OVERVIEW Paul E. Parker American Health Planning Association Illinois Task Force on Health Planning Reform March 10, 2008 Overview of Presentation o History of State Health Planning & Certificate of Need ( CON( CON ) Regulation o Current Status o Recent Trends o Unresolved Questions 1 1
2 HISTORY 1940s -1960s Voluntary city/regional hospital planning & regulation Hospital Survey and Construction Act (Hill-Burton) Regional Medical Programs Comprehensive Health Planning Establishment of State CON programs 5 HISTORY 1972 Section 1122 Review of Capital Expenditures National Health Planning and Resources Development Act 1982 Present Continuation of State health planning and CON regulation in most states and a limited number of regions 6 2
3 HISTORY National Health Planning and Resources Development Act of 1974 Public Law Federal funding of State Health Planning and Development Agencies Federal funding of regional Health Systems Agencies (200+) Mandated comprehensive State Health Plans based on National Guidelines Mandated Certificate of Need programs (25 established prior to federal mandate) until 1982 Repealed in HISTORY CON Regulation After P.L States eliminated CON programs between States eliminated CON programs between Two states, Indiana and Wisconsin, eliminated their CON programs and revived them in some form Indiana repealed its program for a second time in 1997 CON programs continue to exist in D.C., Puerto Rico, and the Virgin Islands 8 3
4 CON Regulation by State 2008 Source:AHPA CON Program No CON 36 States & D.C. have CON programs 7 States only regulate long-term care and/or home health care/hospice services 29 States regulate hospital and acute medical care facility services to varying degrees 27 States control the establishment and expansion of ambulatory surgical facilities under their CON programs 10 4
5 25 States regulate some types of major medical equipment Most States require review of the establishment of certain types of medical care facility and service regardless of the project capital cost Most States (31) employ project capital expenditure levels as one factor defining the need for CON review New Facilities Subject to CON Regulation Most Common Hospitals General and Special Nursing Homes Intermediate Care Facilities/Mental Retardation Ambulatory Surgical Facilities High End Diagnostic Imaging Facilities (PET, MRI, CT) Radiation Therapy Facilities Renal Dialysis Facilities 12 5
6 New Services Subject to CON Regulation Most Common Acute Inpatient Services Pediatric, Obstetric, Psychiatric/Substance Abuse, Medical Rehabilitation, NICU Nursing Home Services Cardiac Surgery & Cardiac Catheterization (especially Angioplasty) Organ Transplantation High End Diagnostic Imaging Services (PET, MRI, CT) Radiation Therapy Renal Dialysis Swing Beds 13 Service Capacities Subject to CON Regulation Most Common Hospital (General and Special) and Nursing Home Beds Operating Rooms Cardiac Catheterization Laboratories High End Diagnostic Imaging Equipment Units (PET, MRI, CT) Radiation Therapy Equipment Units (Linear Accelerators. Gamma Knifes) 15 6
7 Other Facilities and Services Subject to CON Regulation Less Common Home Health and Hospice Lithotripsy Assisted Living Air Ambulance Ultrasound Burn Care 18 Capital Spending Thresholds Thresholds now in use nationally range from $1 to $15 million; national median is approximately $2.3 million Usually come into play for health facility renovation & modernization projects; not applicable to bed expansion or new service projects in most states Most States have distinct equipment spending thresholds; ranging up to $6.75 million; median is approximately $1.4 million 19 7
8 RECENT TRENDS Dissatisfaction with CON but no broad trend for elimination a few states tend to have a perennial debate Incremental reduction in scope of regulation Incremental increases in capital spending thresholds Substitution of CON with other regulatory regimes moratoria, licensure, lotteries, fraud and abuse oversight 20 UNRESOLVED QUESTIONS Is CON Regulation Effective or Beneficial? Academic Reports Consultant Reports Empirical Analyses Federal Trade Commission, & 2004 What are the true costs of CON regulation? No consensus among analyses Few disinterested studies Exaggerated claims The policy maker s s quandary is who and what to believe. 8
9 UNRESOLVED QUESTIONS Macroeconocomic Studies Attempting to Use Multivariate Regression and Correlation Techniques are Problematic Unreliable data Lack of appropriate quantitative tools The wrong questions being asked Inappropriate doctrinal assumptions Lack of accounting for empirical evidence (e.g., experience of U.S. U automobile manufacturers) Extraneous and ignored factors (e.g., intrastate variations greater than interstate variations) FTC Reports Based on assertions of doctrine rather than facts Cost, Quality, Access Innovation, Efficiency Paul E. Parker Chief Hospital Services Planning & Policy and Certificate of Need Maryland Health Care Commission pparker@mhcc.state.md.us American Health Planning Association 7245 Arlington Boulevard, Suite 300 Falls Church, Virginia (703) AHPAnet@aol.com website: AHPAnet.org 9
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STATE OF ILLINOIS HEALTH FACILITIES AND SERVICES REVIEW BOARD 5 525 WEST JEFFERSON ST. SPRINGFIELD, ILLINOIS 62761 (217) 782-3516 FAX: 217) 785-4111 DOCKET ITEM: BOARD MEETING: EXEMPTION NUMBER: E-1 March