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Jackson hospitals: UMMC should not be exempt from Certificate of Need law

Seven Jackson area hospitals are urging the attorney general to withdraw its February opinion exempting University of Mississippi Medical Center (UMMC) from state Certificate of Need (CON) law. CON approval is required for the purchase of major medical equipment and hospital expansions. 

The CON process is designed to help ensure the economic stability of community hospitals and long-term nursing care services. 

Attorney Thomas Kirkland Jr. – on behalf of River Oaks Hospital, Woman’s Hospital at River Oaks, Crossgates River Oaks Hospital, Central Mississippi Medical Center and Madison County Medical Center – said, “We think it’s pretty clear that the CON statute covers University (of Mississippi) Medical Center.”

Kirkland’s facilities, along with St. Dominic-Jackson Memorial Hospital and Mississippi Baptist Medical Center, said in a March letter to the attorney general that they will be “substantially affected” by the decision.

Because the healthcare industry is highly regulated and most physician reimbursements are set by Medicare, Medicaid or insurance companies, the industry does not operate on typical, free-market economic principles. Healthcare providers may upgrade facilities to attract customers, which drives up overhead costs. Too much expansion too fast in a given area can cause health services to be strained or discontinued, as providers compete for patients with private insurance policies, which generally offer better payment for services.

In a July 2000 opinion, the office of then-Attorney General Mike Moore said UMMC was not subject to CON law because it was set up as a teaching hospital, according to Section 37-115-21 of Mississippi code.

With no reason stated, the office withdrew that decision in Sept. 2000, leaving UMMC under the law.

The issue was raised again this February by the State Health Department, the entity responsible for issuing CON approval, after UMMC applied for a CON in June 2009 for the purchase of stereotactic radiosurgery equipment costing $6.7 million. 

In July 2009, following UMMC’s CON request, the Jackson area hospitals filed a joint request with the Health Department for a public hearing regarding the proposed equipment acquisition. 

State health officer Mary Currier said in a letter that she believed UMMC was exempt from the law.

The office of Attorney General Jim Hood issued an opinion Feb. 26 agreeing with the original 2000 opinion exempting UMMC from CON law and stating that “UMMC’s projects do not have to be in keeping with or comply with the State Health Plan.”

The seven Jackson area hospitals cite Mississippi Code Section 41-7-173, which says the law’s definition of “healthcare facility” includes “facilities owned or operated by the state or political subdivision or instrumentality of the state.” Healthcare facilities are subject to CON law. Kirkland’s group also cites an unrelated state Supreme Court decision, which defined UMMC as “an instrument of the state.”

“The law has got to apply to everybody,” Kirkland said.

Mississippi is one of 30 states that regulates healthcare services through a CON process. Other states allow hospitals to build or purchase equipment at their own risk.

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About Amy McCullough