A Kentucky House committee voted 13-3 Thursday against a bill that would give certificate of need applicants more control over the state health care approval process – including giving only applicants, not their opponents, the right to appeal certificate of need decisions in court.
Rep. Marianne Proctor (R-Union) is the sponsor of House Bill 204, which the House Health Services committee rejected Thursday. Proctor was a member of a 2023 certificate of need task force that voted to recommend further study of the state approval process for health facilities and services.
No legislation was recommended by the task force in its final report issued last year.
HB 204 —one of three certificate of need bills filed by Proctor this session—would allow only a certificate of need applicant to file a court challenge on a state’s decision to grant or not grant a certificate of need. Hospitals or so-called “dominant providers” that may be opposed to an application could not ask the state to reconsider its decision or challenge the decision in court.
Currently, both applicants and those opposing the application can sue.
Once a decision is made, a certificate of need would be granted within 40 days unless the applicant (and only the applicant) requests reconsideration of the request.
Kentucky Hospital Association president Nancy Galvagni testified against the bill in committee Thursday. She said HB 204 would deny affected communities “any process to question or challenge a certificate of need application.”
“Through very subtle changes to six separate statutes, HB 204 effectively nullifies Kentucky’s certificate of need program,” Galvagni said. “I wish to be very clear about this: HB 204 does not reform certificate of need. HB 204 does not improve certificate of need. HB 204 effectively abolishes Kentucky’s certificate of need program. HB 204 allows only an applicant to request a public hearing on a certificate of need application. HB 204 allows only a certificate of need applicant to submit information in support of an application. HB 204 requires the (state) to issue a certificate of need even if a decision is appealed.
“In short, HB 204 makes the certificate of need process just another licensing process.” Kentucky Hospital Association president Nancy Galvagni
Currently, up to three dozen types of facilities and/or services are regulated through Kentucky’s certificate of need process. The list includes nursing homes, hospitals, surgical centers, home health, and CT scans.
Lawmakers from rural and urban areas of Kentucky voted against the bill in committee. Among them was Republican Rep. Josh Bray of Mount Vernon, who said he’s concerned that HB 204 would allow providers to “cherry pick” patients in an area where hospitals are heavily reliant on Medicaid reimbursement.
Bray said additional study on the certificate of need process is needed.
“We don’t have free market health care,” Bray said. “We lose money, a lot of money, operating emergency rooms, operating cancer treatment, operating dialysis. And the things that are profitable that hospitals offer that they can make a little bit of money on to break even, I have a big concern that we are going to have people cherry pick those services and not provide the (necessary care).”
“It terrifies me that my hospital back home would have to look at reducing services they offer in order to be accommodated by another group coming in and cherry picking services,” he said. “I do think there are things we can do to modernize that but it really needs to be studied.”
House Health Services chair Rep. Kimberly Poore Moser (R-Taylor Mill) also voted no, saying she doesn’t want to act “prematurely” on issues contained in HB 204.
“This is such a complex issue. I really have reservations about piecemealing this in legislation that hasn’t really been fully vetted by the task force yet. And so I’m going to be a no today, but I do want to help work on this moving forward,” Moser told Proctor in committee before the bill was voted down.
A resolution to reestablish the certificate of need task force this year is now pending in the Senate. Sen. Donald Douglas (R-Nicholasville) is sponsoring the resolution.
Proctor – who filed legislation in 2023 that would have exempted Northern Kentucky’s core counties from the certificate of need process – urged support for HB 204 in her testimony to the committee Thursday.
She tried to reassure the committee by telling them HB 204 would not repeal certificate of need, a process she described Thursday as “a government permission slip” that requires health entities to have state approval to operate in Kentucky.
“What my bill is looking to do is eliminate a dominant provider’s ability to sue somebody out,” Proctor said. “You still must demonstrate that there is a need and you still must go through the nine-step process. What this bill does is eliminate a dominant provider’s ability to sue you.”
St. Elizabeth Healthcare – the dominant healthcare provider in Northern Kentucky – issued a statement on HB 204 after Thursday’s vote. That statement clarified the company’s opposition to repeal of the certificate of need process.
“We applaud the members of the House Health Services Committee for voting today not to move House Bill 204 forward. The bill would effectively repeal CON (certificate of need). As the Interim CON task force concluded this summer, CON is a complex issue and its impacts on the health of Kentuckians are far reaching. CON has been an important mechanism in preserving rural healthcare in the Commonwealth and restricting for-profit entities from cherry picking profitable services away from safety net healthcare providers. Further, HB 204—by removing the right of interested parties to appeal a CON decision—does not allow for due process and would limit the voices of community members.
“St. Elizabeth will continue to advocate for modernization of the CON process,” the statement read.
Proctor’s two other certificate of need bills pending this session are HB 202 (which would increase the threshold for health care equipment and capital improvements requiring certificate of need approval) and HB 203 to exempt several facilities and services (including home health and dialysis centers) from the certificate of need process.
Neither bill has been assigned to a committee with only a handful of days left in the current legislative session.