- Survival of the fittest,
- Pennsylvania style
By Harriet Franklin, Esq.
Published January 1997
|
|
- A long time ago, dinosaurs ruled the world. Then
they became extinct. For the past 17 years, CON ruled Pennsylvania’s health care
industry. Now it is extinct.
- The certificate of need (CON) provisions of
the Health Care Facilities Act (Act) sunsetted on December 17, 1996 after the Pennsylvania
General Assembly’s lame duck session failed to extend the law for a 12-month period.
This came as a shock to most of the health care industry since the Governor, the
Department of Health, the Hospital Association of Pennsylvania and many business groups
and politicians supported the extension of CON for another year.
- The CON provisions of the Act came into
being in 1979 with the goal of containing health care costs by requiring health care
providers to obtain approval prior to engaging in construction and expansion of plant and
services, or developing new services or facilities. Until 1992, the CON provisions were
limited to hospitals, nursing homes and other “health care facilities”. In 1992,
the CON provisions were amended to attempt to level the playing field. For the past four
years anyone, including physicians, who wished to establish, develop or substantially
expand a “clinically-related health service” had to first receive CON approval.
Clinically-related health services were defined by the Department of Health and included
MRI, ambulatory surgery centers, PET scanners, lithotripsy, cardiac catheterization,
inpatient rehabilitation, skilled nursing, inpatient psychiatry and more.
- Over the past year, there was serious
debate as to the continued need for CON, especially as the health care industry is
changing to a market-driven industry. Consensus was, however, that it was a bit premature
to let the CON provisions sunset—that the CON process still served a need in the
Commonwealth. Oh well, CON is now T-Rex.
- Or is it?
- What will happen now? Since just about
every faction supported the extension of CON, there is a possibility it will reappear in
1997. If it does, will it look, smell and taste like the old law? During 1996, lots of
suggestions were made to modify the law: changing the appeals process, eliminating and
adding certain services included on the list of clinically-related health services,
increasing the threshold spending amount that triggers CON review and more.
- Perhaps more interesting, what happens if a
new CON law is enacted soon with an effective date of December 18, 1996? Can there be
retroactive legislation of this sort? And, if there is no retroactivity, how far along
does a project have to be grandfathered?
- Another possibility is that the Department
of Health will, through its authority to license health care facilities, move
substantially the entire CON process into its licensure division. The Act presently
contains licensing provisions which grant the Department broad regulatory latitude. If the
Department truly believes the CON process was valuable with respect to the health and
safety of the people of Pennsylvania, the Department could establish a new mechanism for
licensing which looks very similar to the CON process.
- And what happens to the dozens of CON
applications that were in process as of December 17, 1996? Can these applicants simply
start the service for which they had previously sought a CON? If everyone else can, why
not?
- While all of the answers are not yet
available, it certainly appears that permitting the CON provisions of the Act to sunset
with no advance warning and absolute surprise is creating a frenzy for the Pennsylvania
health care industry. Opportunities may exist for those who either were previously
disapproved for a CON or who never tried due to the lengthy and cumbersome public process.
Threats exist for those who are fearful that additional competition will have a
detrimental economic impact on them.
- Regardless of whether CON exists or not, a
good planning process should be undertaken prior to establishing or expanding any health
service. Planning includes financial, economic and community need to create a level of
confidence that the proposed project makes sense. Planning also should include reviewing
what other laws and regulations may be applicable to the project: licensure, Medicare
certification, accreditation standards and others.
- Remember, while CON as we know it is
extinct, isn’t the lizard the direct descendant of a dinosaur? There is a distinct
possibility, if not probability, that CON, in some form, will return.
Harriet Franklin, Esq., is with the firm, Schnader Harrison Segal
& Lewis in Philadelphia. |
