Certificate-of-need laws have long been controversial among ASC leaders. CON laws require healthcare systems to receive special approval from state governments to expand or build new facilities, and they vary state-to-state.
The aim of CON laws is to control healthcare costs by "avoiding unnecessary expansion or duplicative services within an area. Proponents … contend that if excess health care service capacity exists, price inflation may occur to compensate for new, underused health care services or empty beds," according to the National Conference of State Legislature.
The NCSL also stated that an objective of CON laws is to ensure that rural and other underserved communities have equal access to healthcare services.
However, opponents, many of whom include ASC leaders, say that CON does just the opposite. They argue that CON laws over-restrict market access and end up favoring larger existing providers, inadvertently creating monopolies that end up driving up healthcare costs.
The AMA has presented evidence that demonstrates increased "CON rigor is associated with higher costs," for smaller providers, like ASCs, by forcing them to shoulder the legal and consulting fees that might come with navigating the approval process. It has also, according to the AMA and other opponents, increased cost by eliminating competition.
Nashville, Tenn.-based HCA Healthcare, one of the largest groups in the ASC space, recently won a CON battle in Virginia. Its initial proposal to construct a $234 million hospital and emergency room in Hanover County was rejected twice. Its third and final proposal was much smaller in scope –– a $21 million surgery center.
The proposal was met with hefty opposition from Bon Secours, a smaller rival healthcare system in the region. A representative from the group called the move to construct a facility in Hanover county a "predatory and undeniable market share play."
The approved proposal also includes provisions that the new HCA facility must provide care for all patients regardless of their ability to pay, and that it must provide charity care at almost 1% of the center's total patient services revenue.
The recent HCA development again questions whether a smaller group with fewer resources would have the bandwidth to adjust a proposal multiple times. While the final approved project is much smaller in scope, HCA told the Richmond Times-Dispatch on Aug. 12 that the ASC was "the first" in a larger plan to develop Hanover county.
The project's completion is set for 2027 –– it remains to be seen how the development will impact healthcare costs in the region.