Certificate of Need Laws in Health Care: Past, Present, and Future.

Certificate of need (CON) laws limit the supply of health care services in about two-thirds of U.S. states. The regulations require those who wish to offer new services or expand existing services to first prove to a regulator that the care is needed. While advocates for the regulation have offered several rationales for its continuance, the balance of evidence suggests that the rules protect incumbent providers from competition at the expense of patients, payors, and would-be competitors. In this article, I review the history of CON laws in health care, summarize the large literature evaluating them, and briefly sketch options for reform.JEL Classification: I11, I18, H75.

Associations Between Certificate of Need Policies and Hospice Quality Outcomes.

BACKGROUND: Certificate of need (CON) laws are state-based regulations requiring approval of new healthcare entities and capital expenditures. Varying by state, these regulations impact hospices in 14 states and DC, with several states re-examining provisions. AIM: This cross-sectional study examined the association of CON status on hospice quality outcomes using the hospice item set metric (HIS). DESIGN: Data from the February 2022 Medicare Hospice Provider and General Information reports of 4870 US hospices were used to compare group means of the 8 HIS measures across CON status. Multiple regression analysis was used to predict HIS outcomes by CON status while controlling for ownership and size. RESULTS: Approximately 86% of hospices are in states without a hospice CON provision. The unadjusted mean HIS scores for all measures were higher in CON states (M range 94.40-99.59) than Non-CON (M range 90.50-99.53) with significant differences in all except treatment preferences. In the adjusted model, linear regression analyses showed hospice CON states had significantly higher HIS ratings than those from Non-CON states for beliefs and values addressed (ß = .05, P = .009), pain assessment (ß = .05, P = .009), dyspnea treatment (ß = .08, P < .001) and the composite measure (ß = .09, P < .001). Treatment preferences, pain screening, dyspnea screening, and opioid bowel treatment were not statistically significant (P > .05). CONCLUSION: The study suggests that CON regulations may have a modest, but beneficial impact on hospice-reported quality outcomes, particularly for small and medium-sized hospices. Further research is needed to explore other factors that contribute to HIS outcomes.

Certificate-of-need laws and substance use treatment.

BACKGROUND: Certificate-of-need (CON) laws in place in most US states require healthcare providers to prove to a state board that their proposed services are necessary in order to be allowed to open or expand. While CON laws most commonly target hospital and nursing home beds, many states require CONs for other types of healthcare providers and services. As of 2020, 23 states retain CON laws specifically for substance use treatment, requiring providers to prove their "economic necessity" before opening or expanding. In contrast to the extensive academic literature on how hospital and nursing home CON laws affect costs and access, substance use CON laws are essentially unstudied. METHODS: Using 2002-19 data on substance use treatment facilities from the Substance Abuse and Mental Health Services Administration's National Survey of Substance Abuse Treatment Services, we measure the effect of CON laws on access to substance use treatment. Using fixed-effects analysis of states enacting and repealing substance use CON laws, we measure how CON laws affect the number of substance use treament facilities and beds per capita in a state. RESULTS: We find that CON laws have no statistically significant effect on the number of facilities, beds, or clients and no significant effect on the acceptance of Medicare. However, they reduce the acceptance of private insurance by a statistically significant 6.0%. CONCLUSIONS: Policy makers may wish to reconsider whether substance use CON laws are promoting their goals.

Impact of Certificate of Need on Lumbar Discectomy Reimbursement and Utilization.

The Certificate of Need (CON) program was established to respond to increasing healthcare costs; however, its impact on spine surgery trends is not well understood. The purpose of this study was to evaluate the impact of CON status on utilization of single-level lumbar discectomy. A combined Medicare and private payor database was used to identify single-level lumbar discectomies performed from 2007 to 2015. Utilization and reimbursement trends were compared using the compound annual growth rate (CAGR) with reimbursement adjusted by the consumer price index. In total, 30,617 lumbar discectomies were analyzed. Procedure utilization increased across all settings. CAGR was highest in the outpatient CON group (19.7%) and lowest in the inpatient non-CON group (0.5%). Reimbursement increased in the outpatient setting (CAGR: 1.2% CON, 1.0% non-CON), but decreased in the inpatient setting (CAGR: -6.1% CON, -5.5% non-CON). These trends are important to consider in a value-based healthcare environment. (Journal of Surgical Orthopaedic Advances 31(1):026-029, 2022).

Impact of Certificate of Need on Lumbar Discectomy Reimbursement and Utilization.

The Certificate of Need (CON) program was established to respond to increasing healthcare costs; however, its impact on spine surgery trends is not well understood. The purpose of this study was to evaluate the impact of CON status on utilization of single-level lumbar discectomy. A combined Medicare and private payer database was used to identify single level lumbar discectomies performed from 2007 to 2015. Utilization and reimbursement trends were compared using the compound annual growth rate (CAGR) with reimbursement adjusted by the consumer price index. For this study, 30,617 lumbar discectomies were analyzed. Procedure utilization increased across all settings. CAGR was highest in the outpatient CON group (19.7%) and lowest in the inpatient non-CON group (0.5%). Reimbursement increased in the outpatient setting (CAGR: 1.2% CON, 1.0% non-CON), but decreased in the inpatient setting (CAGR: -6.1% CON, -5.5% non-CON). These trends are important to consider in a value-based healthcare environment. (Journal of Surgical Orthopaedic Advances 31(4):218-221, 2022).

Certificate of Need and Inpatient Psychiatric Services.

BACKGROUND: Certificate of need (CON) laws require would-be healthcare providers to obtain the permission of a state board before opening or expanding. 35 US states operate some type of CON program, though they vary widely in the specific services or equipment they target, with 25 states requiring CON for psychiatric services. AIMS OF THE STUDY: We provide the first empirical estimates on how CON affects the provision of psychiatric services. METHODS: We use Ordinary Least Squares regression to analyze 2010-2016 data on psychiatric CON from the American Health Planning Association together with data on psychiatric facilities and services from the National Mental Health Services Survey. RESULTS: We find that CON laws targeting psychiatric services are associated with a statistically significant 0.527 fewer psychiatric hospitals per million residents (20% fewer) and 2.19 fewer inpatient psychiatric clients per ten thousand residents (56% fewer). Psychiatric CON is also associated with psychiatric hospitals being 5.35 percentage points less likely to accept Medicare. Our estimates for CON's effect on the number of inpatient psychiatric beds per ten thousand residents and the likelihood of psychiatric hospitals accepting Medicaid, private insurance, or charity care (no charge) are negative but not statistically significant. DISCUSSION: CON laws may substantially reduce access to psychiatric care. A limitation of our study is that there is almost no variation in which states have psychiatric-related CON laws during the time period of our data (New Hampshire is the only state to change its psychiatric services CON requirement in this period, repealing its CON program entirely in 2016). This precludes the use of preferred econometric techniques such as difference-in-difference. IMPLICATIONS FOR HEALTH POLICIES: Our results indicate that CON laws may reduce access to inpatient psychiatric care. State policymakers should consider whether CON repeal could be a simple way of enhancing access to psychiatric care. IMPLICATIONS FOR FURTHER RESEARCH: While hundreds of articles have examined the effects of CON laws, we believe ours is the first to provide empirical estimates of their effects on mental health care specifically. We hope it is not the last.

The impact of certificate of need laws on heart attack mortality: Evidence from county borders.

Certificate of need (CON) regulations requires that health care providers obtain state approval before offering a new service or expanding existing facilities. The purported goal of CON regulations is to reduce health care costs by generating regional economies of scale and reducing redundant investments resulting from excessive competition. Critics of CON regulations note that the regulatory environment increases the costs of expansion and may incentivize health care providers to forgo capital investment, which can have a negative effect on health outcomes. To estimate the net effect of CON regulations, I use a border discontinuity design to measure within-regional heart attack mortality spanning 1968 to 1982. I estimate that CON regulations led to an increase in heart attack deaths, by 6%-10%, three years after the policy was enacted.

The Impact of Certificate of Need Status on the Utilization and Reimbursement of Open and Endoscopic Carpal Tunnel Release.

A certificate of need (CON) permits a healthcare organization to build new facilities only if significant medical needs exist. Many states have implemented CON programs to prevent procedure overutilization and price inflation. We hypothesized that there are no differences in reimbursement or utilization for open and endoscopic carpal tunnel release (CTR) when comparing states with and without CON programs. We queried a private-payer database to identify open and endoscopic CTRs performed between 2007 and 2015. In total, 82,689 CTRs were identified: 70,160 open, 12,529 endoscopic. Reimbursement increased for open procedures (compound annual growth rate [CAGR] 1.0% CON, 1.4% non-CON) but only marginally increased or decreased in the endoscopic group (CAGR -0.8% CON, 0.2% non-CON). Utilization increased across all settings, and was highest in the endoscopic CON group (CAGR 17.9%). Least growth was seen in the open non-CON group (CAGR 10.0%). Overall, CON programs may not actually decrease CTR spending or utilization. (Journal of Surgical Orthopaedic Advances 30(2):090-092, 2021).

Early Acceleration of COVID-19 in Areas with Larger Nursing Homes and Certificate of Need Laws.

BACKGROUND: Severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) outbreaks have become common in large nursing homes, placing not only residents but also staff and community members at risk for infection. However, the relationship between larger nursing homes and the community spread of SARS-CoV-2 has not yet been documented. OBJECTIVE: To examine the association between county average nursing home bed size and presence of certificate of need (CON) laws, which influence nursing home size, with county-level SARS-CoV-2 prevalence over time. DESIGN: Cross-sectional study using county-level data from March 11 through June 12, 2020. PARTICIPANTS: All US counties with at least one nursing home (n = 2,883). MAIN MEASURES: The main explanatory variables were county average nursing home bed size and presence of a CON law. The main outcome was the cumulative number of SARS-CoV-2 cases on each day of the study period adjusted for county population size and density, demographic and socioeconomic characteristics, total nursing home bed supply, other health care supply measures, epidemic stage, and census region. KEY RESULTS: By June 12, a between-county difference in average nursing home size equal to 1 bed was associated with 3.92 additional SARS-COV-2 cases (95% CI = 2.14 to 5.69; P < 0.001), on average, and counties subject to CON laws had 104.53 additional SARS-CoV-2 cases (95% CI = 7.68 to 201.38; P < 0.05), on average. Counties with larger nursing homes also demonstrated higher growth in the frequency of SARS-COV-2 throughout the study period. CONCLUSIONS: At the county level, average nursing home size and CON law presence was associated with a greater frequency of SARS-CoV-2 cases. Controlling the impact of the coronavirus 2019 pandemic may require additional resources for communities with larger nursing homes and more attention towards long-term care policies.

Travel Time to Radiation Oncology Facilities in the United States and the Influence of Certificate of Need Policies.

PURPOSE: Radiation therapy often requires weeks of daily treatment making travel distance a known barrier to care. However, the full extent and variability of travel burden, defined by travel time, across the nation is poorly understood. Additionally, some states restrict radiation oncology (RO) services through Certificate of Need (CON) policies, but it is unknown how this affects travel times to care. Therefore, we aim to evaluate travel times to US RO facilities and assess the association with CON policies. METHODS AND MATERIALS: RO facilities were identified from the 2018 National Plan and Provider Enumeration System (n = 2302). Travel times from populated US census tracts to nearest facility were calculated; differences by rurality, area deprivation, and region were computed. Multivariable linear regression was used to estimate adjusted differences in travel time by area characteristics. Logistic regression was used to assess the association of state CON laws with travel time >1 hour. RESULTS: Among 72,471 census tracts, 92.4% were within 1 hour of the nearest radiation facility. Among the 12,453 rural tracts, 34.4% were >1 hour. On adjusted analysis, the 3054 isolated rural tracts had an estimated 58-minute (95% confidence interval [CI] 57, 59; P < .001) longer travel time than urban tracts. CON laws decreased rural travel time overall, but the association varied by region with decreased odds of prolonged travel in the South (P < .001), increased odds in the Northeast and Midwest (P < .001), and no association in the West (P = NS). CONCLUSIONS: Isolated rural US census tracts, accounting for 9.4 million Americans, have nearly 1-hour longer adjusted travel time to the nearest RO facility, compared with urban tracts. CON laws had region-dependent associations with prolonged travel.

Assessing the Efficacy of Certificate of Need Laws Through Total Joint Arthroplasty.

ABSTRACT: Lawmakers suggest Certificate of Need (CON) laws' main goals are increasing access to healthcare, increasing quality of healthcare, and decreasing healthcare costs. This retrospective database study aims to evaluate the effectiveness of CON through analysis of total knee, hip, and shoulder arthroplasty (TKA, THA, and TSA, respectively). A review was performed using the Humana Insurance PearlDiver national database from 2007 to 2015. Access to care was approximated by the rates of total joint arthroplasty (TJA) in patients diagnosed with arthritis to the corresponding joint. The quality of care was assessed using complication rates after TJA. The total cost of TJA was approximated from average reimbursement to the healthcare facility per procedure. Patients in states without CON programs received TKA, THA, and TSA more frequently (p < .0001, p = .250, p = .019). No significant difference was found in studied complication rates between CON and non-CON states. Similarly, there was no trend found when comparing the cost of each procedure in CON versus non-CON states. These findings are consistent with other recent studies detailing the impact of CON regulation on THA and TKA. The apparent nonsuperiority of CON states in achieving their purported goals may call into question the effectiveness of additional bureaucracy and regulation, suggesting a need for further examination.

Utilization and Reimbursement Trends Based on Certificate of Need in Single-level Cervical Discectomy.

OBJECTIVE: To compare utilization and reimbursement for cervical discectomy in certificate of need (CON) and non-CON states. SUMMARY OF BACKGROUND DATA: Cervical discectomy is a commonly performed procedure, but little is known about utilization and reimbursement patterns in the CON setting. INTRODUCTION: Cervical discectomy is increasingly used and remains effective. Increasing healthcare costs have led to decreased reimbursement and a push toward outpatient procedures. CON programs were established to ensure that expansion of medical facilities were within acceptable use; however, the literature on their impact in spine surgery is limited. The purpose of this study was to examine the impact of CON status on both reimbursement and utilization in cervical decompression in both inpatient and outpatient settings. METHODS: We analyzed a private payer and Medicare database from 2007 to 2015. All single-level cervical discectomies were selected then split into CON and non-CON states. Each group was then further split into inpatient and outpatient. Utilization and reimbursement were analyzed using the compound annual growth rate (CAGR), with reimbursement adjusted by the US Bureau of Labor Statistics Consumer Price Index. RESULTS: We identified 1,580 single level cervical decompressions in our study period: 888 were done in the inpatient setting, whereas 692 were done in the outpatient setting. Adjusted reimbursement only increased in the non-CON outpatient setting, with a CAGR of 2.0%. All other settings had decreased reimbursement. Utilization increased across all four settings, with the highest growth seen in the CON outpatient setting, with a CAGR of 12.7%. The highest average reimbursement was in the non-CON outpatient setting at $4,237. DISCUSSION: Cervical discectomy is seeing increased utilization most rapidly in the outpatient setting, although reimbursement is declining with the exception of procedures done in the non-CON outpatient setting. Surgeons should be aware of these trends in the changing healthcare economic climate. STUDY DESIGN: A retrospective database review.

Association of State Certificate of Need Regulation With Procedural Volume, Market Share, and Outcomes Among Medicare Beneficiaries.

Importance: Certificate of need laws provide state-level regulation of health system expenditure. These laws are intended to limit spending and control hospital expansion in order to prevent excess capacity and improve quality of care. Several states have recently introduced legislation to modify or repeal these regulations, as encouraged by executive order 13813, issued in October 2017 by the Trump administration. Objective: To evaluate the difference in markers of hospital activity and quality by state certificate of need status. These markers include hospital procedural volume, hospital market share, county-level procedures per 10 000 persons, and patient-level postoperative outcomes. Design, Setting, and Participants: A cross-sectional study involving Medicare beneficiaries aged 65 years or older who underwent 1 of the following 10 procedures from January 1, 2016, through November 30, 2018: total knee or hip arthroplasty, coronary artery bypass grafting, colectomy, ventral hernia repair, lower extremity vascular bypass, lung resection, pancreatic resection, cystectomy, or esophagectomy. Exposures: State certificate of need regulation status as determined by data from the National Conference of State Legislatures. Main Outcomes and Measures: Outcomes of interest included hospital procedural volume; hospital market share (range, 0-1; reflecting 0%-100% of market share); county-level procedures per 10 000 persons; and patient-level postoperative 30-day mortality, surgical site infection, and readmission. Results: A total of 1 545 952 patients (58.0% women; median age 72 years; interquartile range, 68-77 years) at 3631 hospitals underwent 1 of the 10 operations. Of these patients, 468 236 (30.3%) underwent procedures in the 15 states without certificate of need regulations and 1 077 716 (69.7%) in the 35 states with certificate of need regulations. The total number of procedures ranged between 729 855 total knee arthroplasties (47.21%) and 4558 esophagectomies (0.29%). When comparing states without vs with certificate of need regulations, there were no significant differences in overall hospital procedural volume (median hospital procedure volume, 241 vs 272 operations per hospital for 3 years; absolute difference, 31; 95% CI, -27.64 to 89.64; P = .30). There were no statistically significant differences between states without vs with certificate of need regulations for median hospital market share (median, 28% vs 52%; absolute difference, 24%; 95% CI, -5% to 55%; P = .11); procedure rates per 10 000 Medicare-eligible population (median, 239.23 vs 205.41 operations per Medicare-eligible population in 3 years; absolute difference, 33.82; 95% CI, -84.08 to 16.43; P = .19); or 30-day mortality (1.17% vs 1.33%, odds ratio [OR], 1.04; 95% CI, 0.93 to 1.16; P = .52), surgical site infection (1.24% vs 1.25%; OR, 0.93; 95% CI, 0.83 to 1.04; P = .21), or readmission rate (9.69% vs 8.40%; OR, 0.80; 95% CI, 0.57 to 1.12; P = .19). Conclusions and Relevance: Among Medicare beneficiaries who underwent a range of surgical procedures from 2016 through 2018, there were no significant differences in markers of hospital volume or quality between states without vs with certificate of need laws. Policy makers should consider reevaluating whether the current approach to certificate of need regulation is achieving the intended objectives and whether those objectives should be updated.

Certificate-of-Need State Laws and Elective Posterior Lumbar Fusions: Is It Time to Repeal the Mandate?

OBJECTIVES: Our study aimed to assess whether elective posterior lumbar fusions (PLFs) performed in states with Certificate-of-Need (CON) laws versus states without CON laws had lower utilization rates, lower costs, and better quality of care. METHODS: The 2005-2014 100% Medicare Standard Analytical File was queried to identify patients undergoing elective 1- to 3-level PLF. Differences in per-capita utilization, 90-day reimbursements, and proportion of high-volume between CON and No-CON states were reported. Multivariate analyses were used to analyze 90-day complications and readmissions. RESULTS: A total of 188,687 patients underwent an elective 1- to 3-level PLF in a CON state and 167,642 patients in a No-CON state during 2005-2014. The average per capita utilization of PLFs was lower in CON states as compared with No-CON states (14.5 vs. 15.4 per 10,000 population; P < 0.001). Average 90-day reimbursements between CON and No-CON states differed by a small amount ($22,115 vs. $21,802). CON states had a higher proportion of high-volume facilities (CON vs. No CON-40.9% vs. 29.9%; P < 0.05) and lower proportion of low-volume facilities (CON vs. No-CON-37.2% vs. 45.0%; P < 0.05). PLFs performed in CON states had slightly lower odds of 90-day complications (odds ratio 0.97 [95% confidence interval 0.96-0.99]; P < 0.001) and readmissions (odds ratio 0.95 [95% confidence interval 0.93-0.97]; P < 0.001). CONCLUSIONS: The presence of CON laws was associated with lower utilization of elective 1- to 3-level PLFs and a greater number of high-volume facilities. However, their effect on quality of care, via reduction of 90-day readmissions and 90-day complications, is minimally significant.

Certificate of need laws: a systematic review and cost-effectiveness analysis.

BACKGROUND: Certificate of Need (CON) laws, currently in place in 35 US states, require certain health care providers to obtain a certification of their economic necessity from a state board before opening or undertaking a major expansion. We conduct the first systematic review and cost-effectiveness analysis of these laws. METHODS: We review 90 articles to summarize the evidence on how certificate of need laws affect regulatory costs, health expenditures, health outcomes, and access to care. We use the findings from the systematic review to conduct a cost-effectiveness analysis of CON. RESULTS: The literature provides mixed results, on average finding that CON increases health expenditures and overall elderly mortality while reducing heart surgery mortality. Our cost-effectiveness analysis estimates that the costs of CON laws somewhat exceed their benefits, although our estimates are quite uncertain. CONCLUSIONS: The literature has not yet reached a definitive conclusion on how CON laws affect health expenditures, outcomes, or access to care. While more and higher quality research is needed to reach confident conclusions, our cost-effectiveness analysis based on the existing literature shows that the expected costs of CON exceed its benefits.

Renovación de las Pensiones Asistenciales No Contributivas en el año 2019 / 3 RENOVATION OF NON-CONTRIBUTIVE PENSIONS FROM THE YEAR 2019

Estudio Descriptivo. Análisis y comparación de las características de la población que concurrió al Servicio de Medicina Legal del Hospital Nacional A. Posadas, a renovar sus pensiones asistenciales a través de la confección del Certificado Médico Oficial Digital, en el año 2019, y comparándolas con las renovaciones a nivel nacional ocurridas en el año 2014

Descriptive Study. Analysis and comparison of the population´s characteristics who concur to the Legal Medicine Service at the National Hospital A. Posadas, to renovate their welfare pensions through the confection of the Digital Official Medical Certificate, year 2019, and comparing them with the national renovations which happened in 2014

Certificate of need and the cost of competition in home healthcare markets.

We used 2010-16 Medicare Cost Reports for 10,737 freestanding home health agencies (HHAs) to examine the impact of home health (HH) and nursing home (NH) certificate-of-need (CON) laws on HHA caseload, total and per-patient variable costs. After adjusting for other HHA characteristics, total costs were higher in states with only HH CON laws ($2,975,698), only NH CON laws ($1,768,097), and both types of laws ($3,511,277), compared with no CON laws ($1,538,536). Higher costs were driven by caseloads, as CON reduced per-patient costs. Additional research is needed to distinguish whether this is due to skimping on quality vs. economies of scale.

Does ACDF Utilization and Reimbursement Change Based on Certificate of Need Status?

INTRODUCTION: Anterior cervical discectomy and fusion (ACDF) remain an effective treatment option for multiple pathologies of the cervical spine. As the health care economic climate has changed, so have reimbursements with a concomitant push toward outpatient procedures. Certificate of Need (CON) programs were established in response to burgeoning health care costs which require states to demonstrate need before expansion of medical facilities. The impact of this program on spine surgery is largely unknown. The purpose of this study was to examine the impact of CON status on reimbursement and utilization trends of ACDF in both inpatient and outpatient settings. MATERIALS AND METHODS: We queried a combined private payer and Medicare database from 2007 to 2015. All single-level ACDFs were identified. We then split each procedure into those performed in CON versus non-CON states. We then further split each group into the inpatient and outpatient settings. Compound annual growth rate (CAGR) was used to compare utilization and reimbursement trends. Reimbursement was adjusted for inflation using the United States Bureau of Labor Statistics consumer price index. RESULTS: A total of 32,727 single-level ACDFs were identified, of which 28,441 were performed in the inpatient setting, and 4286 were performed in the outpatient setting. Reimbursement decreased across all settings, with the most pronounced decrease in the non-CON outpatient setting with an adjusted CAGR of -11.0%. Utilization increased across all groups, although the fastest growth was seen in the outpatient CON setting with a CAGR of 47.7%, and the slowest growth seen in the inpatient non-CON setting at a CAGR of 12.9%. CONCLUSIONS: ACDF utilization increased most rapidly in the outpatient setting, and CON status did not appear to hinder growth. Reimbursement decreased across all settings, with the outpatient setting in non-CON states most affected. Surgeons should be aware of these trends in the changing health care environment.