Georgia exempts general surgery centers from CON rules

Georgia physicians and hospitals are wrangling over a rule change that paves the way for general surgeons to establish ambulatory surgery centers without going through the certificate-of-need process.

The state's Dept. of Community Health in December 2007 unanimously approved a rule that reclassifies general surgery as a single specialty rather than a multispecialty. It amends related certificate-of-need requirements for physician-owned ambulatory surgery facilities. Georgia law exempts surgery centers focusing on a single specialty, such as orthopedics or obstetrics and gynecology, from demonstrating need.

Until now, state health rules subjected general surgery facilities to the same certificate-of-need requirements as broader, multispecialty surgery centers. The new rule went into effect Jan. 3.

The Georgia Alliance of Community Hospitals is suing the health department to block what it says is an illegal move that will threaten access to care and allow general surgeons to skirt charity care requirements in favor of better-paying patients.

Meanwhile, the physician community is defending the regulation, which doctors and state health officials say will give patients more choice and attract much-needed general surgeons to the state.

Physician-owned ambulatory surgery centers face certificate-of-need hurdles in nearly 30 states, according to American Medical Association and Ambulatory Surgery Center Assn. research. But Georgia's situation is unique.

"Georgia's [former] rule that does not recognize general surgeons as specialists is out of line with every other state and every other medical indication we have out there," said Medical Assn. of Georgia Executive Director David Cook, saying it unfairly singled out general surgeons under the ambulatory facility requirements. He said the hospitals' lawsuit to reverse the regulation is aimed at limiting the kind of competition that can benefit patient care with low-cost, high-quality services.

Outpatient surgery centers are more convenient for doctors and patients, said John T. Perry III, MD, president of the Georgia Society of General Surgeons, an advocacy group formed to push for the recent rule change.

"Patients have lousy scheduling, high prices, and hospitals don't have to accommodate them because they know they have to go there," said Dr. Perry, a Cartersville, Ga., general surgeon. Surgical manpower also suffered because of the former rule, he said. Now, the potential boost in income from owning a surgery center could help doctors in the face of declining reimbursement in the largely rural state.

The Medical Assn. of Georgia and the Georgia Society of General Surgeons are seeking to join the case as defendants.

Dept. of Community Health Commissioner Rhonda M. Medows, MD, said the rule change "means greater access for patients, and for us as [public] health plan administrators, more options in terms of how we staff our provider networks."

American Medical Association policy opposes certificate-of-need restrictions on physician-owned ambulatory surgery centers. A June 2007 AMA Board of Trustees report states that such laws have not controlled health care costs. U.S. Justice Dept. testimony submitted to Georgia's certificate-of-need reform commission in February 2007 cited similar data and concluded that competition from the doctor-owned surgery centers could help cut costs and broaden access.

The hospitals in their lawsuit challenge the state health department's authority to alter the certificate-of-need regulations. The Georgia Alliance, with its more than 50 nonprofit hospital members, says the rule change defies the Legislature's intent to exclude general surgeons from the single-specialty exemption for outpatient surgery centers because general surgery services could overlap with other medical specialties.

Without the certificate-of-need process to weed out unnecessary duplication, health care costs go up, said the Georgia Alliance's attorney, Leo E. Reichert. The rule change also leaves community hospitals with the burden of covering indigent and uncompensated care, he said.

The hospitals are asking the Superior Court of Dougherty County to block the rule while the case is pending. They fear that general surgeons will rush to take advantage of it and drain hospitals of specialists and revenue. A hearing date has not been set.

Reichert said the state's actions conflict with prior court and attorney general opinions.

In 2004, the Georgia Supreme Court upheld the certificate-of-need restrictions on general surgery ambulatory facilities. Citing that decision, a 2005 nonbinding attorney general opinion said the Dept. of Community Health did not have the power to change the status of the exemptions.

The department disagrees. Officials said that in 2007, the Legislature, after hearing from the certificate-of-need reform commission, passed a law allowing the department's board to promulgate rules related to the program. The agency also said the court opinion did not address the department's role in the process.

Doctors say they provide more than their fair share of charity care and that they will continue to do so.

The Medical Assn. of Georgia and the Georgia Society for General Surgeons, along with the health department, support legislation that would mandate that ambulatory surgery centers provide a minimum level of indigent and uncompensated care. Meanwhile, a bill redefining general surgeons as a single specialty sits in a committee after the full House voted to send it back in April 2007.

MAG's Cook said fears that general surgery centers will overstep their bounds are unwarranted. The outpatient facilities generally are limited to two operating rooms and must have a certain level of capital investment, likely preventing them from offering a broad range of services, such as overnight care, he said.

In addition, hospitals are eligible for tax benefits and state funds for uncompensated care that ambulatory surgery centers are not, said Christopher Smith, MD, a general surgeon at Albany (Ga.) Surgical PC. The practice challenged the state regulations in the 2004 state Supreme Court case.

The Albany doctors also are named as defendants in the hospital industry's lawsuit because they tried to open a surgery center in the early 1990s. The plaintiffs want to prevent another attempt.