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New law whittles appeals chain for healthcare providers

A bill that became law July 1 will streamline the certificate of need process for healthcare providers, but could also be the beginning of the end for the entire CON process, said a key House committee chairman.

House Bill 826, passed last session, provides a direct appeal to the Mississippi Supreme Court for hospitals dissatisfied with a CON ruling from the State Department of Health. Before a hospital can expand, build a new facility or purchase certain equipment, the department of health must first grant a CON for the project. Previously, if the agency denied a provider’s CON, the first route of appeal was to a chancery court. Often, though, the final decision would lie with the Mississippi Supreme Court. The new law eliminates the chancery court from the appeals chain.

“We’re having a problem with (litigation) on all CONs and the CON process,” said Rep. Steve Holland, D-Plantersville, the bills’ author and chairman of the Public Health and Human Services Committee. “What that does is hold up the progress of healthcare for sometimes two to three years. It always winds up in the supreme court anyway.”

One CON fight that is currently before the state’s high court is the back-and-forth between  St. Dominic Hospital in Jackson and Florida-based Health Management Associates, which recently opened a new hospital in Canton. St. Dominic wants to build a satellite facility in Madison, but HMA has opposed those efforts, citing the redundancy of two major hospitals within 10 miles of each other. The department of health ruled in HMA’s favor last August, and a Madison County chancery judge affirmed that ruling last December.

The two sides are in the process of submitting briefs to the supreme court.

According to an attorney who represents St. Dominic, this new law would have saved the hospital a lot of time and money.

“For example, we had an order (denying) the Madison County CON from the department of health on Aug. 26, 2010,” said Jonathan Werne, of the Brunini Firm in Jackson. “Well, we immediately appealed that to the chancery court, both parties briefed it, and Judge Cynthia Brewer in Madison County issued a decision on Dec. 22, 2010. We then appealed that decision like seven days later (to the Mississippi Supreme Court). So there’s a four-month process that we could have avoided, saving time and expenses to both sides.”

Paul Arrington, vice president for business development at St. Dominic, said the bill’s time- and money-saving design is its main purpose, but it could also potentially serve to quicken the availability of new medical care. “The sooner you get a decision, the sooner you can start providing whatever the healthcare system delivery is. It’s not just purely about time and money.”

The bill cleared each chamber of the Legislature unanimously.

“Why the hell go through appeals?” Holland said. “Why the hell drag it on? Let’s just send it straight to the top and cut out the middle man.”

With CON-streamlining bill now a statute, Holland said he expects the legislative session that starts in January to include at least one bill aimed at eliminating more than the middle man.

“In my heart of hearts, I believe this is, quite frankly, a clarion call for the abolition of CONs. I believe pretty strongly in the free enterprise system. I believe we’re to the point, with the maturation of the healthcare delivery system, that CON has held down costs. There’s no doubt about that. But certainly, I think all of this is leading to us getting into the 21st century and getting rid of CONs.  They’re becoming obsolete.”

Legislation that would have eliminated the CON process has passed the House before, but has died in the Senate.

“We talk about it fairly often, publicly and privately, but nothing has happened yet,” Holland said.

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