Virginia Senate Sidelines Efforts to Overhaul State's Health Regulatory System 

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Steve Earley

Virginia hospitals have prevailed, for this year at least, on one of the most heavily lobbied issues of the 2016 General Assembly – one that pitted them against the state’s doctors and health care insurers.

Efforts supported by physicians and insurers to overhaul or phase out a 40-year-old system of state regulations governing the construction of new health care facilities fizzled out Monday in the state Senate.

As a result, the state’s Certificate of Public Need program, which hospitals lobbied vigorously to keep intact, will remain in place at least until 2017. The system requires issuance of a state certificate before new health care services can be introduced in a locality.

The most sweeping attempt to overhaul the system, which passed the House of Delegates last month, would have removed the certificate requirement for hospitals, outpatient surgery centers, medical-imaging services and similar facilities by July 1, 2017.

By Monday, the only remaining component of those efforts was a much narrower measure that would have removed the certificate requirement only for medical imaging services by Jan. 1, 2019. That bill, HB350, was sent to the Senate Finance Committee and carried over to the 2017 Assembly session.

Advocates of dismantling the system, including doctors and insurers, said it would improve access to health care services and lower costs by spurring competition. But hospitals said the system prevents over-expansion of medical facilities and helps buffer hospitals against mounting financial pressures, including low reimbursements from Medicaid and Medicare, the government health care programs for the poor and elderly.

Hospital executives said deregulating the system would allow competing entities to “cherry-pick” the most lucrative medical services while leaving hospitals burdened with money-losing emergency rooms and charity care.

Sen. Steve Newman, R-Lynchburg, said lawmakers held repeated discussions with hospital representatives through the weekend but were unable to reach consensus.

Newman characterized the certificate process as an outmoded vestige of Nixon-era government price controls.

On a voice vote, the Senate sent the measure to the Finance Committee on a motion by Sen. Emmett Hanger, R-Augusta County. The maneuver effectively sidelined the bill for this session because the deadline has passed for considering revenue-related measures. The bill contained a provision for raising and spending money for charity care.

The Assembly is scheduled to adjourn this weekend.

This story originally appeared on PilotOnline.com


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