While their merits are hotly debated, the substance of certificate of need laws often exist in a state of flux.
Certificate of need (CON) laws have a huge influence on hospices’ ability to expand patients’ access to care, as well as impact the competitive landscape and quality of care in a given market.
A myriad of factors play into states’ decisions to keep these laws on the books, according to Judi Lund Person, vice president of regulatory and compliance for the National Hospice and Palliative Care Organization (NHPCO).
“It really depends on the current culture of the state,” Lund Person told Hospice News. “It’s the atmosphere, beliefs about free-market economy and all those bigger things that play a role in whether a state even remotely considers a CON or not.”
As of December, 35 states and the District of Columbia had some type of CON program in place, reported the National Conference of State Legislatures (NCSL).
Wide variation exists in these laws from state to state in terms of requirements and applicability. Currently, 14 states have CON laws that include hospices.
Though New York enacted the first of these laws in 1964, they began to pick up steam due to federal requirements implemented during the 1970s. These federal rules were eventually repealed, and since then states have been left to make up their own minds about CON.
Will CON laws last?
To date, 12 states have rescinded their CON laws or allowed them to expire, according to NCSL. New Hampshire, which scrapped CON in 2016, was the most recent.
According to some, the prevalence of these laws may continue to dwindle.
“In this day and age, we’ll see how long CONs last,” Freeman Smith, North Region president for Traditions Health, told Hospice News at the VALUE Conference in Chicago. “There’s a real push to get rid of the CON state. It was a process to control the cost 20 years ago, but right now the market place determines that.”
Regulators and legislators in at least 18 states began reassessing their CON laws during the past three years.
Lawmakers introduced bills to remove all or most CON requirements in Alabama, Alaska, Kentucky, Maine, Mississippi, Missouri, North Carolina, Oklahoma, South Carolina and West Virginia.
Several states also enacted or considered CON reform bills, some of which removed requirements for certain settings, including Michigan, Tennessee, Washington, Montana and Virginia. Montana removed CONs for all settings except nursing homes as of last October.
Additionally, three states — Connecticut, Delaware and Massachusetts —appointed commissions to study the issue.
CONs and the quality question
One area of contention about CONs is their impact on quality.
Depending on the models used by individual states, CONs have the potential to either lower or raise the bar, according to Katie Wehri, director of home health and hospice regulatory affairs for the National Association for Home Care & Hospice (NAHC).
“It depends on the CON regulations and enforcement, but hospices often have to report quality information to the state,” Wehri told Hospice News. “They’re held accountable to that, and the expectation is that they’re going to be better than the national average. Other times, you have hospices that have been in existence for a long time, but may not be pushed to deliver at a higher-quality level and don’t have the competition coming in to increase their accountability.”
In addition to quality, concerns have multiplied over market control when it comes to operators in CON states, according to Wehri. Some worry that hospices with existing CONs could have an influence on new providers entering their service regions.
“CONs requirements come up for review periodically in each state,” said Wehri. “For years I’ve heard concerns about how sometimes competition is actually squelched by these, that some hospices who already hold a CON may have more control over who else comes into their market.”
The impact on competition
CONs are a key consideration for hospices seeking to expand into new geographies, whether through acquisitions or de novos.
Hospices are increasingly stepping over state lines to establish new businesses when requests to set up shop aren’t granted in others. This trend is causing some states without CONs to declare licensing moratoriums, according to Lund Person.
Despite the widespread debate, fears of market saturation or declines in quality could lead some states to keep CON requirements in place.
“Certificate of need, or some version of control of growth, is now much more interesting to some states because there has been massive growth in hospice and some really concerning care delivery issues,” Lund Person told Hospice News. “It’s thinking about the potential quality consequences of unbridled growth.”
Complications for patients and clinicians
A possible drawback of certificate of need regulations is that they may limit patient options, awareness and access to hospice services.
“If we’re thinking about the potential minuses, there’s not as much consumer choice,” said Lund Person. “In some parts of the country, having a certificate of need might limit who gets hospice care. They might only have one option.”
On the other hand, states without CON regulations could have an influx of providers, causing confusion among consumers bombarded with too much information and too many options for end-of-life care, Wehri told Hospice News. This can make it more difficult for hospices to stand out from the crowd to patients and families as well as referral sources, she continued.
The same can be true among clinicians considering work in the hospice field, a major concern amid ongoing shortages.
“With the workforce shortages that we’re dealing with, if you have a lot of hospices that could make it really difficult to get staffing at any one of those hospices,” Wehri said. “With a handful of hospices, the workforce might be more spread out.”
Editor Jim Parker contributed to this report.