Florida Certificates of Need about to Become History


Gayle Harrell

Gayle Harrell

A session-long drama over a top priority of House Speaker Jose Oliva is coming to an end after the Senate on Friday prepared to pass a far-reaching bill that would eliminate a controversial hospital regulatory program.

With little discussion, the Senate took up a House certificate-of-need bill (HB 21) and modified it to include what Senate sponsor Gayle Harrell said was an agreement between the chambers.

As amended, the bill would eliminate the certificate-of-need requirement for new general hospitals and “tertiary services” on July 1. It would repeal a certificate-of-need requirement in 2021 for specialty hospitals, such as children’s hospitals.

Tertiary services include such things as organ transplants and pediatric open-heart surgery and neonatal intensive-care units.

Under longstanding law, hospitals have needed to seek certificates of need from the state Agency for Health Care Administration to build facilities or to add the services. That often has led to legal battles involving the agency and hospitals.

As an example of how the process works, two hospitals — Largo Medical Center in Pinellas County and Baptist Medical Center Jacksonville — notified the state this month of their intentions to obtain certificates of need for new transplant programs.

Baptist Medical Center applied for a certificate of need to establish an adult bone-marrow transplant program. Largo Medical Center applied for a certificate of need to establish an adult heart-transplant program.

The Senate is positioned to vote on the bill as soon as Monday. The measure then will have to go back to the House for a final vote.

Before Friday’s decision, Senate Health and Human Services Appropriations Chairman Aaron Bean, R-Fernandina Beach, expressed reservations about the amendment.

“I’m not a fan of it,” he said. “I’m hopeful that there will still be another change or more changes made.”

Earlier in the legislative session, Bean worked closely with Harrell, R-Stuart, on a Senate CON bill (SB 1712).

The pair crafted a proposal that would have eliminated CON but would have required new hospitals being built to meet minimum bed requirements, have emergency rooms, serve Medicare and Medicaid patients and provide certain levels of charity care. The provisions were designed to prevent a proliferation of boutique or specialty hospitals.

But those provisions were struck from the bill by the Senate Appropriations Committee last week after intense lobbying efforts by Senate leaders, including Senate President Bill Galvano, a Bradenton Republican who is working to deliver Oliva’s priority.

Though the bill was revamped at the Appropriations Committee, the latest amendment wouldn’t allow new orthopedic hospitals, oncology hospitals or cardiac hospitals to be built, which would protect existing hospitals from facing boutique competition, Harrell said. Such facilities have been banned in the state.

“One of the things I am so pleased about in this bill is that we are not repealing the ban on these boutique hospitals,” said Harrell, chairwoman of the Senate Health Policy Committee. “So, this is a major, major win for the Florida Senate.”

Certificates of need have long been a highly controversial issue in Florida’s health-care industry. Hospitals, nursing homes, and hospices need to get CONs before building new facilities or adding many types of programs.

At least part of the rationale for CON regulations is to avoid costly duplication of programs and services.

There have been efforts to eliminate certificate-of-need regulations for the past 20 years. But Oliva — who has focused on disrupting the health-care system — made eliminating the regulatory program a top priority.

While the speaker easily shepherded the House version through his chamber, getting the Senate to sign on to repealing the program has been more difficult.

“This is the most contentious issue I have ever tackled, in trying to take total elimination of CON (for hospitals) across the board … and set a stage for this to move forward carefully,” Harrell told the News Service on Thursday night. “And I think we’re getting there.”

Though it’s the broadest CON repeal the Senate has discussed, it’s not a complete repeal of the program as Oliva advocated. The Senate amendment would maintain the regulations for nursing homes and hospice programs.

While much of the CON focus has been on new hospital construction, the Senate amendment also would immediately eliminate CONs for tertiary services and direct a legislative office to study the impact after six months.

The move to eliminate CON for tertiary services comes after two administrative court rulings in 2018 upholding state decisions to deny CONs to Arnold Palmer Medical Center, which coveted a pediatric heart-transplant program, and Nemours Children’s Hospital, which sought a pediatric heart-transplant program and a pediatric heart-and-lung transplant program.

In the December 2018 ruling in the Arnold Palmer Medical Center case, Judge W. David Watkins agreed with the state that due to the relatively small number of pediatric heart transplants statewide “and agreement that volume is positively correlated with care,” awarding a new program could “lead to or correlate with negative patient outcomes “

But some industry officials support deregulating tertiary services.

Cleveland Clinic Florida CEO Wael Barsoum pointed to a need for the state to embrace competition and not regulations.

“By deregulating tertiary services, we are ensuring patients with the most complex cases are receiving the highest quality care,” he said in a statement to the News Service.

Bean acknowledged that the CON bill will have a far-reaching impact on the entire session.

“This one is long term,” he said. “This one is, once we do this, it’s hard to go back. You can’t go back.”