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Task force targets changes to some CON laws

Health Care Landscape

Last summer, a 16-member Certificate of Need (CON) Task Force was created to study and deliver recommendations on how to improve the existing CON process in response to an evolving health care industry and changing market conditions.

On Jan. 17, after five months of meetings, the 16-member group issued its 18-page Final Report with a list of recommendations for amending the CON laws to the Connecticut General Assembly’s Insurance and Real Estate Committee.

The task force was assigned 10 priority matters, several of which address recent concerns across the state that large hospital systems are closing services, raising prices, and are not sufficiently responsive to community needs.

Among key recommendations made was for the state to provide OHS with additional resources to carry out its enforcement and compliance activities, to more clearly define what triggers a fine, when a fine begins and under what conditions it ends, and closing a loophole in which a healthcare entity can repeatedly “suspend” a service for 180 days in order to avoid termination, which requires a CON process.

On some key topics, members were unable to reach a consensus and did not make recommendations.

Those charges include instituting a price-increase cap tied to the cost-growth benchmark for consolidations, guaranteed local community representation on hospital boards and capturing lost property taxes from hospitals that have converted to nonprofit entities.

The working group assigned to focus on the ability of workforce and community representatives to intervene or appeal decisions also filed no recommendations as it “believes the current process is working well,” according to the executive summary.

Also, a group that was asked to study the benefits and consequences of removing the CON process entirely did not submit recommendations or findings.

Task force membership, which was dissolved upon submission of its final report, comprised lawmakers, hospital and OHS representatives, consumers, providers and advocates for health equity, access and quality.

Members included Jean Ahn, chief strategy officer for Nuvance Health which operates Sharon Hospital, and Nancy Heaton, CEO of the Sharon-based Foundation for Community Health (FCH).

Nuvance is currently seeking permission from OHS to shutter Sharon Hospital’s Labor and Delivery unit and replace its Intensive Care Unit with a Progressive Care Unit. A CON is pending on that request. Both New York State and Northwest Corner residents are potentially impacted.

A ‘challenging process’

To accomplish its mission, the CON Task Force designated five working groups to examine the issues, three of which delivered recommendations to the full task force.

Heaton played a key role in two of those three groups and took the lead in reporting on her group’s findings during the final meeting.

“It was a challenging process for us,” given the nature of the topics under discussion and the relatively short window of five months in which to submit recommendations, noted Heaton, who is no stranger to the CON process. She was appointed to head FCH shortly after that agency was created in June of 2003 by the conversion of Sharon Hospital to a for-profit hospital.

“It was almost like we were just at the beginning when it ended. We didn’t have a third party to help us. We all were educating ourselves. But I think we did the best we could do in the timeframe that we had.”

Recommendations and findings

The full task force and the individual working groups gathered information, heard testimony by experts and interested parties and deliberated possible recommendations on how to strengthen the program.

“This process shouldn’t be so painful. We just need a lot more clarity about terms and processes, and that would help. There needs to be more transparency on both the community side and the healthcare side about what goes into the decision making, what are the rules and what are the guardrails,” noted Heaton.

The following is a summary of their findings by topic:

Changes to OHS’s long-term, statewide health plan to include an analysis of services and facilities and their impact on equity and underserved populations: It was recommended that the OHS Statewide Healthcare Facility Utilization Study and Statewide Healthcare Facilities Services Plan be expanded to identify disparities in health status and healthcare outcomes resulting from the distribution and availability of healthcare resources.

The group further recommended that the scope of the plan include as much data as possible to create an “atlas” to proactively identify where additional health care facilities may be needed to address community health needs, particularly in underserved communities.

Also recommended was the development of a statewide database of community health-focused grant opportunities to facilitate departments taking a broad range of approaches to address community needs, including relating to the social determinants of health.

Setting standards to measure quality due to a consolidation: The group supported expanding the CON process to allow OHS to consider service quality, based on generally accepted, nationally recognized clinical best practices and guidelines. It was recommended that quality measures should be measured against a healthcare entity’s baseline quality and that all providers should be subject to the same rules.

Enacting higher penalties for noncompliance and increasing the staff needed for enforcement: The  group recommended that more clarity be established on what triggers a fine, when the fine begins and under what condition it ends.

Also, the group suggested that any assessed fine should continue to accrue after the fined entity has filed a CON application through the final decision by OHS, and that a healthcare entity terminating its services without OHS approval bear the responsibility and costs for returning those services if OHS determines they should have been continued.

According to the report, one member raised concerns about an approach that penalizes healthcare entities, rather than one that focuses on community health collaboration.

Task Force members also suggested closing a current loophole in which a healthcare entity can repeatedly “suspend” a service for 180 days — with brief periods of service in between — in order to delay or avoid a termination, which require a CON process.

One member raised concern that this might encourage healthcare entities to file a CON to terminate services rather than collaborate with OHS to ensure community needs are met.

It was recommended that the legislature explore the Massachusetts policy model related to closing “essential services,” and that OHS receive additional resources to carry out its enforcement and compliance activities.

The Attorney General’s authority to stop activities as the result of a CON application or complaint: The removal of the word “willfully” from the legal standard needed to be shown in order to impose a civil penalty in Connecticut State Statute 19a-653 was recommended.

The report noted that these changes were proposed by the Attorney General when debating House Bill 5449 in 2022. One member raised a concern that this will create additional confusion for healthcare providers.

The group recommended that the legislature enable OHS to issue, and the Attorney General to enforce, cease and desist orders to stop a CON violation.

The ability of workforce and community representatives to intervene or appeal decisions: The strengthening of OHS oversight authority regarding community health needs assessment was recommended, as was the expansion of OHS’s authority to include healthcare provider organizations, excluding those that primarily serve Medicaid and underserved patient populations, beyond just  hospitals.

Guaranteed local community representation on hospital boards: A consensus was not reached regarding the value of local representation on local hospital boards or on the larger system boards.

Heaton noted that “Some members felt the primary role was fiduciary and focused on the financial resiliency of the individual hospital and the larger health system. Some felt strongly that a primary role, but also including fiduciary, was to represent the local community in such a way that its needs and issues, and its specific role in the community, are communicated and an integral part of the larger strategic plan for the individual hospital and its role within the larger system.”

The working group determined that there were a variety of hospital governing structures, including individual or regional boards, but that it was important for members to represent the local population and be organized in a welcoming manner, according to the report.

“The group determined that community boards do not have authority over strategic hospital decisions, and it would benefit task force members to better understand the governance structure and how hospitals use local insight or expertise to inform their strategic decisions.”

In addition, the group posed several questions about whether local community or regional hospital  boards can be directly responsible for a Community Needs Assessment and local implementation.

Some members noted the importance of local hospital boards representing the diversity of the local population and need to have local insight on boards to ensure the hospital better serves the community.

Members also felt it was important to expand this representation to larger hospital system boards.

Debate centered on whether boards should be required to have a minimum number of community members, and some though it was important that boards have the necessary experience, skills and expertise to manage a shifting healthcare landscape. For example, board members with expertise in strategic planning, healthcare delivery trends and healthcare innovation may better serve community needs, the report found.

However, the group reached consensus that individual hospital boards that are part of a larger

healthcare network “should have the ability to inform the larger network about strategic planning initiatives impacting the local board’s community.”

Time will tell if lawmakers take action

As for what comes next, Heaton said she is optimistic that lawmakers will act, unlike in 2016, when none of the recommendations of a prior CON Task Force were implemented.

“We are in a different place as a state. There is a lot more community engagement than there has been,” said Heaton, and OHS has become more sensitive to hearing input from the community. “We did the best that we can, and now it is up to the legislative branch. Somebody has to take it up and move with it.”

State Representative Maria Horn (D-64), said she is thankful for the task force’s efforts, which she regards as “the beginning of the process.

“I submitted a bill this year (HB 5931) that grew out of that work, which would give the Attorney General authority to assist the Office of Health Strategy in enforcing certificates of need.”

Horn added that she has been speaking with members of the task force, and with the leadership of the committees charged with the various issues, “about the importance of carrying their work forward.”

 

What is a Certificate of Need?

 

A Certificate of Need (CON) is a regulatory process, administered by the state Office of Health Strategy (OHS), requiring certain types of healthcare providers – including hospitals and nursing homes – to obtain state approval prior to making major changes in the healthcare landscape. Examples include mergers, major capital investments in new equipment or facilities, changing access to services or discontinuing a medical service.

Its function is to prevent costly duplication of services, protect access to and continuity of healthcare services and ensure that Connecticut residents have a voice regarding healthcare for their communities.

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