Last week, I filed three bills concerning the Certificate of Need process. House Bills 202, 203, and 204 reenvision the Certificate of Need application procedure, and move the state toward a robust and vibrant healthcare model accessible to all Kentuckians. This week, I wanted to provide summaries of these legislative proposals. In addition, you can read summaries of each piece of legislation, as well as download the entire text of a bill or resolution, on the official General Assembly website, legislature.ky.gov.
HB 202: This measure increases the capital expenditure and major medical equipment expenditure minimums. In short, this would allow individuals and organizations to establish healthcare facilities without being bound to the Certificate of Need process if the cost of the project is below the expenditure minimums defined in the bill. As it stands, many healthcare operations are thwarted by the capital expenditure minimum due to the arduous application process that follows a project exceeding the minimum. This will allow for fewer projects to enter the Certificate of Need process, and those that do enter it will be more thoroughly considered due to the lower volume of applications as a result of the expenditure minimum increase.
HB 203: Currently, there are few medical services exempted from the Certificate of Need process. This is not conducive to the health and welfare of Kentucky’s citizens and forces many areas to be deprived of necessary healthcare facilities that would otherwise be in operation. This bill expands the exemption list to include psychiatric hospitals, physical rehabilitation centers, chemical dependency programs, hospices, home health services, kidney disease treatment centers, mental health services, and birthing centers, which are vital to our communities.
HB 204: Presently, dominant healthcare providers are afforded the right to veto applications of competitors entering the service region they operate within. This has many disastrous outcomes, but none worse than limited access to care. Populations grow, needs expand, and communities must be able to adapt to these changes by having a fair application process for medical providers wanting to operate in the area. This bill eliminates the dominant provider’s veto on Certificate of Need applications. This allows the applying provider to have a fair and public hearing that will allow them to show the need for service in the region. Other providers will still be a part of the process as their experience and expertise are critical to understanding the needs of the community, but they will not be able to stop an application process before it begins.
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By Rebecca Hanchett for LINKnky
Rep. Marianne Proctor has followed politics for quite a while. But it was government response to COVID-19 that she says showed her just how much politics can impact individual lives.
Concern with state mask mandates and closures specifically drove the speech language pathologist to step up her involvement in Northern Kentucky (“there’s a loss of learning and social skills lost” with those mandates, Proctor told LINK nky). Already active in the Boone County Republican Party, the Texan-turned-Kentuckian ran in 2022 against incumbent Sal Santoro for the Kentucky House District 60 (running through central Boone County) won.
Proctor took office in January of this year after running unopposed last fall.
The freshman lawmaker told LINK it’s her job to put her constituents first. She said none of her bills is driven by a personal agenda. That includes House Bill 312, one of Proctor’s bills filed in her first legislative session that would have exempted Boone, Kenton, and Campbell counties from the state’s certificate of need law. The bill never came to a vote, but the issue is still alive for now.
A state legislative Certificate of Need Task Force in December recommended further study in 2024 ahead of any potential reforms to the law. Proctor is a member of the group.
Kentucky’s certificate of need law is one of 35 such laws nationally, according to a Jan. 2023 brief from the National Conference of State Legislatures. Proponents say the laws are designed to help regulate health care access and costs. Opponents say the laws are anti-competitive. Proctor said Kentucky’s law is overly broad when compared to other states.
Kentucky’s law regulates at least 18 types of health care facilities, according to NCSL. That’s compared to only one type of facility (long-term care) regulated under certificate of need laws in, for example, both Ohio and Indiana.
“When I was out knocking on doors (in 2022) this was a top concern that I heard from my constituents. And I continue to hear from the people,” Proctor told LINK. “So I think it’s time for reform, certainly I think, to be aligned with what Ohio does, what Indiana does. Why we hang on to 32 different services and technologies that are regulated by certificate of need is a little bit puzzling when neighbors all around us have very limited if any (of those restrictions).”
School choice is another issue that Proctor said her constituents care about. But it looks like any new proposals to allow public funds for private education or non-common schools could potentially be left to a vote at the polls instead of a final vote in the Senate and House. That’s because of a 2022 Kentucky Supreme Court ruling that found a 2021 private school voucher law unconstitutional. A 2023 lower court ruling that found a public charter school funding statute unconstitutional adds another layer of intrigue.
Proctor said she is in full support of a referendum on the issue.
“I think that’s where it belongs,” she said. “It belongs with the people, letting them make that decision. I would rather they make the decision rather than a bunch of politicians.” What the people she represents want for their government is what, she said, should happen.
“That’s what really got me to run is the frustration of people not being responded to,” she said. According to Proctor, “I’m not coming in with an agenda. My constituents come to me and bring a concern.”
Those concerns often make it into bill form. But not every bill is assigned to a committee for review and possible approval. That legislation instead never leaves the House (or Senate) floor. Proctor would like to see that changed.
“I would like to see that every bill gets an opportunity to go to a committee and let the committees decide that. That may be an unrealistic expectation given that there are so many of us, and many of us feel the need to bring lots of bills,” she said. “But I would like to see that because I believe, at least for myself, my legislation is constituent-driven.”
Rep. Marianne Proctor (R-Union) represents District 60 which covers mid portions of Boone County. She is a member of the House Veterans, Military Affairs and Public Protection Committee, House Local Government Committee, House Families and Children Committee, and the Certificate of Need Task Force. Additionally, she is a member of the Interim Joint Committees on Families and Children, Local Government, and Veterans, Military Affairs, and Public Protection. She is also a member of several legislative caucuses.
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By Marianne Proctor and Jaimie Cavanaugh | Opinion Contributors to Courier Journal
Louisville entrepreneur Dipendra Tiwari saw a problem and responded in 2018. Nepali-speaking refugees needed nursing care and other services in their native language, so he and a business partner decided to fill the void.
Their solution was Grace Home Care, a home health agency focused on the Nepali-speaking community. Yet before Tiwari and his partner could open, they found themselves caught in a policy debate that Kentucky lawmakers have slow-walked for more than 40 years.
Certificate of need laws are about money
Nobody in the commonwealth can launch or expand health care services without a government permission slip called a certificate of need or CON. The regulation has nothing to do with health and safety. Facility licensing boards already exist to ensure high standards of care.
CON laws are about money. They limit competition for established providers, clearing the field for health care monopolies. Patients have less access. Doctors and nurses have less mobility. And entrepreneurs have less opportunity to disrupt the status quo.
Big hospitals love the protectionism in Kentucky, where getting a CON is expensive, slow and sometimes impossible. Many potential investors do not bother, but Tiwari and his partner tried anyway. They even filed a constitutional lawsuit. The state battled them to the 6th U.S. Circuit Court of Appeals and ultimately blocked their bid to help their neighbors.
Certificate of need laws:Kentucky has created a legal monopoly for healthcare.
Tiwari was stunned. He did not think such a rigged system could exist in the United States, which he saw as a land of opportunity when he immigrated from Nepal in 2008. Nobody stopped him when he earned an MBA and opened an accounting practice. Tiwari could have chosen almost any industry without state interference. But health care has a special carveout from the normal rules of fair trade.
Policymakers know that CON laws create a rigged system
Policymakers are aware of the rigged system. Federal antitrust agencies sounded the alarm as far back as the 1980s. “By their very nature, CON laws create barriers to entry and expansion to the detriment of health care competition and consumers,” the Department of Justice has warned.
Additional evidence comes from a supermajority of national studies. A 2023 report from the Institute for Justice, the public interest law firm that represented Grace Home Care, examines 128 papers describing more than 400 tests. Nearly 90% of these tests show negative or neutral results from CON laws, and negative results are five times more likely than positive results.
Kentucky even commissioned its own study in 2013. Deloitte, the consulting firm hired for the job, looked at the evidence and recommended suspending or “discontinuing the CON program for health agencies.” Instead of taking this advice, Kentucky largely ignored it.
Wake up!We are still in a pandemic and vaccines are our best defense against long COVID.
The timid approach backfired during the COVID-19 pandemic. Recognizing the need for greater flexibility, Kentucky regulators scrambled to waive CON application requirements. Gov. Andy Beshear followed in 2023 with two additional emergency measures: He suspended CON provisions for ambulance services and psychiatric care beds.
The executive orders all but admit that CON laws hamper health care access. But rather than follow the evidence, state lawmakers opted for more talk in 2023. The General Assembly established a CON task force that published its findings on Dec. 14, 2023, after months of hearings. The result is disheartening. What Kentucky needs, the commission decided, is more study.
Apparently, 40 years is not enough. Kentucky families might disagree. What they need is action.
Bills to reform certificate of need in Kentucky may help
Three bills filed in the state House on Jan. 9, 2024, can help. HB 204 would speed up CON applications and prevent competitors from interfering in the process. HB 203 would remove CON requirements for needed services including mental health, rehabilitation, home health, dialysis services, and birth centers. And HB 202 would eliminate CON requirements for building projects under $10 million and equipment purchases under $5 million.
Critics warn that removing the CON safety net would leave established providers vulnerable, especially in rural areas. But the issues have been hashed and rehashed, and the evidence does not support the alarmism.
CON laws are bad for vulnerable populations everywhere. Nepali-speaking refugees in Louisville suffer when the state limits health care access, and so do rural Kentucky families. More than 40 years of evidence confirms it.
Rep. Marianne Proctor represents Kentucky House District 60, which covers part of Boone County. Jaimie Cavanaugh is a certificate of need specialist at the Institute for Justice in Arlington, Va.
By Rebecca Hanchett for LINKnky
State Rep. Marianne Proctor filed three separate bills on Tuesday that would reform Kentucky’s certificate of need law without carving out a specific exemption for the Northern Kentucky region, as she proposed in 2023.
The centerpiece of the three bills is a proposal that would exempt more types of facilities and services (rather than a geographic area) from Kentucky’s certificate of need law. Those exemptions would include dialysis centers, freestanding birth centers (legal but not operating in Kentucky), psychiatric hospitals, physical rehab centers, hospice, home health, and alcohol and drug abuse rehabilitation services. The legislation sponsored by Proctor is House Bill 203.
“Those specific industries would not need to go through the certificate of need process,” Proctor told reporters Tuesday.
Certificate of need exemptions in Kentucky are now largely limited to assisted living centers, veteran nursing homes, rural health clinics, group homes, freestanding residential substance use disorder treatment facilities, and outpatient behavioral health treatment centers.
The new bill differs substantially from legislation sponsored by Proctor last year. That bill unsuccessfully proposed exempting NKY’s core counties of Boone, Campbell, and Kenton from the certificate of need process. The measure was HB 312.
So far, Proctor has not filed similar legislation in the 2024 state legislative session that began Jan. 2.
A second certificate of need bill sponsored by Proctor Tuesday would allow health care facilities to spend up to $10 million on capital improvements without requiring a certificate of need. The threshold to trigger required certificate of need for adding major medical equipment to a facility would be $5 million (the current minimum is $3.98 million, Proctor said Tuesday). That bill is HB 202.
Proctor said the legislation would help the health care industry keep up with the cost of inflation.
“That number can’t go backward,” Proctor said of the thresholds in the bill.
The third certificate of need bill filed so far this session by Proctor is HB 204. That proposal, she said, would prevent hospitals or “dominant” certificate of need holders from holding up certificate of need approval of a facility or service with a judicial appeal or request for reconsideration from the state. It would also guarantee public hearings for certificate of need applicants.
A certificate would be issued 40 days after the state Cabinet for Health and Family Services makes a decision to grant the certificate of need, according to the bill.
“It doesn’t change the process,” Proctor said of HB 204. “It doesn’t take away any of the rights of a dominant provider. It just prevents them from suing along the way. It levels the playing field.”
The NKY region has been a hotbed of debate about the certificate of need process over the past two years. Most debate has centered on St. Elizabeth Healthcare, the region’s largest healthcare provider. The company holds four of the region’s seven required certificates of need for hospitals and approximately eight percent of NKY’s total certificates of need for all facilities and services.
Proctor told reporters that her bills address what she called “the imminent risk that we face right now” in health care services and access in Kentucky.
“Since 2006 in Kentucky, we’ve had four rural hospitals that have closed, and we have 12 that are in danger. And that is with certificate of need. We are far, far behind,” she told reporters. “If you have one provider, it’s Economics 101; It doesn’t make it more affordable, it doesn’t make it more accessible.”
A 2023 state legislative task force on certificate of need opted not to recommend specific changes to the state law when it issued its final report in December. Proctor was a member of that task force. Although she voted to accept the task force report, Proctor told LINK nky after the final task force meeting that she would file certificate of need legislation in 2024.
A resolution to reestablish the task force for 2024 is pending in the Kentucky Senate.
In response to the bill filings Tuesday, St. Elizabeth Healthcare president and CEO Garren Colvin released the following statement:
“After more than six months of study, the legislature’s Certificate of Need task force recommended further analysis of the issue in 2024, noting that CON has far reaching impacts on both business and health in the Commonwealth. St. Elizabeth supports this recommendation and feels that any legislation to reform CON before the task force has completed its work would be premature.”
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BY: SARAH LADD for Kentucky Lantern
FRANKFORT — Saying that Kentuckians should have options when it comes to where they get their medical care, a Northern Kentucky representative filed three bills Tuesday aimed at reforming the state’s certificate of need (CON) requirements.
The bills, filed by Rep. Marianne Proctor, R-Union, would increase health care expenditures minimums, removesome services like freestanding birthing centers and mental health services from CON requirements, and keep dominant providers from suing new applicants during the CON process, among other things.
Proctor broke her legislation into these three bills to, she said, keep them simpler for both the public and lawmakers:
- The first bill says facilities spending less than $10 million on a project – a new building, expanded bed capacity – would not need to obtain a CON. This bill also allows for the purchase of medical equipment without a CON up to $5 million.
- A second bill, which Proctor said some may find “ a little bit more…controversial,” would repeal the CON requirement from some services. Those include psychiatric hospitals, physical rehabilitation hospitals, chemical dependency programs, hospice, freestanding hemodialysis units, freestanding birthing centers and more.
- The third and final of Proctor’s bills would keep “dominant providers” from suing CON applicants during the review process. This bill “doesn’t change the process at all, it doesn’t take away any of the rights of the dominant provider, it just prevents them from suing along the way,” Proctor said.
To address “significant mental health crises, significant overdoses (and) drug abuse” facing the state now, Proctor wants to find a way to get more facilities in the state that can take discharged patients facing mental health issues or needing drug-related treatments.
“What I’m hearing from hospital discharges, they have nowhere to discharge their patients to. There is nowhere to go,” Proctor told the Lantern. “So if we loosen up the certificate of need, perhaps more of those facilities could be there.”
The certificate of need requirement mandates regulatory mechanisms for approving major capital expenditures and projects for certain health care facilities, according to the National Conference of State Legislatures.
Some proponents of keeping CON in place have said that if hospitals lost private pay patients, serving only people on government insurance would force them to close services or altogether.
Proctor sees that as an “invalid argument.”
“Creating more access — isn’t that what we want to do, is to give people more accessibility to give them more options, more choices?”
Sometimes called the “competitor’s veto,” certificate of need laws were in effect in 35 states and Washington D.C. as of December 2021.
Lawmakers spent six months studying the issue in 2023 and found they needed to continue studying it. Sen. Donald Douglas, R-Nicholasville, filed a resolution on Jan. 4 seeking to reestablish the task force, with the goal of considering reforms and submitting findings by Dec. 1.
Proctor said her bills “addressed a lot of concerns that my colleagues had” about CON and they are meant to “address the eminent risks that we face right now.”
She did not work with the Kentucky Hospital Association on the bills, she said. KHA representatives spoke at multiple committee hearings in 2023 and have opposed removing CON from freestanding birth centers, for example.
A KHA spokeswoman has not yet returned a Lantern request for comment.
This story will update.
Kentucky Rep. Marianne Proctor (R-Union) will address the Covington Board of Commissioners at the city’s legislative meeting on Sept. 26 on laws surrounding medical certificate of need in Kentucky.
Medical certificate of need laws require that Kentucky healthcare institutions providing certain services must first prove a communal need for such services before establishing facilities in an area. They are issued by the Kentucky Cabinet for Health and Family Services, and there are currently 21 medical services that require a certificate of need, according to Kentucky’s state health plan.
Proctor had introduced legislation during the last session to repeal certificate of need, but the bill failed to pass. After the session concluded, the legislature established a task force on certificate of need to assess if the laws were necessary or worthy of reform. Proctor sits on the task force.
Proponents of certificate of need laws claim that medical markets can become over-saturated in the absence of this type of regulation. They also argue that certificate of need laws make it easier for rural communities, where it’s difficult for hospitals to turn a profit, to maintain access to a medical safety net.
On the other hand, opponents of certificate of need claim that it adds an extra layer of bureaucracy to an already administratively top-heavy sector. Additionally, opponents argue that certificate of need requirements provide a mechanism by which large healthcare organizations can establish monopoly power over particular regions.
The issue is particularly salient to Northern Kentucky, and conversations surrounding the regulations often zero in on St. Elizabeth Healthcare, one of the largest healthcare providers in the tri-state, which some have characterized as a monopoly that uses certificate of need to secure its market share. St. Elizabeth itself challenges this characterization.
Certificate of need is a frequent topic of debate among state and local officials. Sen. Shelley Funke Frommeyer (R-Alexandria), for instance, recently spoke to the certificate of need task force about the effects of certificate of need on the potential for freestanding birth centers in the commonwealth.
Furthermore, debates over the laws have already occurred publicly in Kenton County. Earlier this year, Proctor visited the Erlanger City Council, where she shared her views on the laws and floated the idea of a city resolution to support reform. The subsequent meeting saw representatives from St. Elizabeth and other medical institutions as well as political groups, crowd into the Erlanger council chambers, where they debated the necessity of the laws. The Erlanger City Council eventually cast a 6-3 vote in favor of reform. Fort Wright has also voted to support reform.
The meeting will take place on Sept. 26 at 6 p.m. at Covington City Hall on Pike Street. It will include time for public comment.
Read LINK nky’s coverage of the certificate of need state task force as well as other stories related to healthcare here.
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Rep. Marianne Proctor of Union will serve on the Kentucky General Assembly’s task force on Certificates of Need, according to an afternoon announcement from House Speaker David Osborne.
Legislative leadership created the panel to focus on issues pertaining to the Certificates of Need program, as well as identifying both areas of improvement and potential solutions.
“Since beginning my tenure as State Representative, I have found a passion for the Certificate of Need process and finding avenues to grant citizens of this state access to the care that they need. With this passion comes feelings of pride and privilege that I get to serve this task force,” Proctor said. “Through the 2023 Regular Session, I sponsored legislation that would change Certificates of Need all together, and I am hopeful that the work of this task force will result in meaningful discussion to change healthcare in the commonwealth for the better.”
The certificate of need requirement has long been a point of discussion among policymakers considering how to improve access to quality healthcare.
A certificate of need, also known as CON, is a legal document required in Kentucky before a proposed acquisition, expansion, or creation of a healthcare facility can occur. Some certificate of need requirement exists in more than 30 other states today.
Kentucky policymakers have grappled with the issue for several decades and this year’s task force began due to discussion during the 2023 Regular Session. The legislative task force was created to investigate the commonwealth’s CON program as a whole, as well as how it ties in with the state health plan and other existing laws and regulations relating to the healthcare industry.
“Our objective is to come into each session with an agenda aimed at building a brighter future for the people of our commonwealth,” Osborne said. “Task forces like this one have proven to be a vital tool, providing us with an opportunity to focus on issues as they develop.”
Task force members will meet throughout the 2023 Interim and submit their findings and recommendations to the Legislative Research Commission by Dec. 4, 2023, for referral to the appropriate committee or committees.
Proctor serves the state’s 60th House District, which includes part of Boone County. In addition to the task force, Proctor will serve the interim joint committees on Families and Children, Local Government, as well Veterans, Military Affairs and Public Protection.
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This op-ed is written by Marianne Proctor, a Republican candidate in the primary election for House District 60.
Sick of proposed gas taxes to further increase our pain at the pump? Sick of 15-year politicians who find it easier to create new taxes rather than to trim the bloated budget? Sick of politicians who have become more interested in lobbyists and special interest groups than in people like you and me who voted them in? Sick of politicians who find it easier to go along with liberal policies and left-leaning media hype than to fight for your rights to speak freely, keep your business open, keep the money you earn, keep and bear arms, keep your medical freedoms, keep your kids in schools of your choosing, and keep the values that have made this country strong? Yeah, me too. I’m a non-politician and health care provider who isn’t putting up with this sickness anymore. I’m Marianne Proctor, and I’m running for State House Representative District 60.
Having served as a speech-language pathologist and an Outpatient Rehabilitation Coordinator of Speech and Education in one of the nation’s top five hospitals, I’ve dedicated my life to helping people find and use their voices, and improve their quality of life. As your next house representative, I’m ready to use my skills and experience to identify short-term problems, develop long-term effective solutions, and amplify your voice in Frankfort.
Having been a residential realtor, I listened to my clients’ needs, provided optimal solutions, and advocated for them in negotiations. I ensured they were in the best possible position to provide for their families, protect their assets, and thrive in their chosen communities. As the District 60 representative, I am dedicated to helping you, the voters of Boone County, feel at home in your State House.
As a community leader, I have invested myself in people and projects that have made my life richer and more meaningful. These include my husband Gregg, to whom I have been married for 25 years, my sweet dog Dakota, the elementary school girls I coach, the young moms I mentor, the women I lead in Bible study, the church I serve, and the precinct I chair. Each of these people, as well as those I have met door-to-door and at our rallies, have expressed a need to be seen and heard by Kentucky’s leaders. We are strongly pro-life, pro-family and pro-1st and 2nd amendment. It is because of you that I am compelled to run for office and act on your behalf. Listening to you, talking about the issues that concern you, and discussing workable solutions with you has not only prepared me for the office, but has fueled my passion for serving.
As a marathon runner, I know the discipline it takes to go the distance. I am not afraid of hard work, competition, pain or personal injury, inclement weather, roadblocks or obstacles in my path. I know I have what it takes to run your concerns right up the steps of the House in Frankfort. All I’m asking for is your support. Vote Marianne Proctor, House Representative, District 60, on Tuesday, May 17.