State lawmakers are once again aiming at the major regulatory pillars of North Carolina's healthcare competition.
The Senate Health Committee will hold a meeting Wednesday to discuss Senate Bill 370. Senate Bill 370 is a broad bill to repeal rules that require state officials to analyze whether new equipment or facilities are needed in certain areas before they are approved.
The North Carolina Healthcare Association is a hospital lobbying group that strongly supports maintaining the certificate law, writing in its 2024 legislative summary that “the law ensures access to care for medically unserved populations and prevents oversupply that can lead to increased patient health costs.” But opponents of the rules say they will curb competition.
Republican-controlled state legislatures have lacked Need Certificate Act in several small ways in recent years, including some changes passed as part of a 2023 deal to approve the expansion of Medicaid.
However, broader efforts to completely repeal the law have been hit down in the face of intense lobbying by the hospital industry. Senate Republicans hope for a different outcome in 2025.
A complex issue this year is development from outside the legislature. The unanimous decision from the North Carolina Supreme Court is to allow advances in cases that end with a certificate of necessity law that is found to be statewide unconstitutional.
Most states, including North Carolina, use the required certificate laws to regulate the healthcare industry. If a hospital company wants to build a new hospital, the state government must approve the plan. If a hospital or local clinic wants to buy expensive new equipment, they will need the state government to approve.
The theory is that by forcing healthcare providers to prove that new services or tools are in fact needed, the “needs” of a “certificate of needs” can therefore stop unnecessary spending that state regulators pass on to patients in the form of higher bills.
Some powerful lawmakers view certificate rules as outdated or non-American. Because rules curb free market competition and give governments too much power to the healthcare industry.
In response, hospital executives have been lobbying heavily to Congress to maintain these rules, ensuring that they don't shake up an industry that major lobbying groups estimate is worth $40 billion a year. The state Department of Health and Human Services issues a necessary certificate decision and can appeal.
These appeals often lead to years of legal battles where billion-dollar hospital chains are advantageous over small businesses and individual physicians who don't have the same type of legal budget.
