Massachusetts now applying CON rules to surgery centers

In an effort to rein in health care costs, Massachusetts health officials have toughened their certificate-of-need requirements, including new rules for physician-owned ambulatory surgical centers.

The state's Dept. of Public Health approved amendments to the state's CON law that require single-specialty surgery centers to demonstrate a community need before getting state approval to open a new facility. The physician-owned centers previously were exempt from the process, which largely regulated hospital projects.

The rules, which took effect last month, exempt existing ambulatory surgical centers. Hospital outpatient projects costing more than $25 million also must submit to the determination of need process.

The regulations were part of a health care cost-containment measure Gov. Deval L. Patrick signed in August 2008 to boost the state's universal coverage initiative. They came amid continued criticism from the U.S. Justice Dept. and organizations such as the AMA that CON laws have failed to keep health care costs down and that they stifle competition and access to low-cost, high-quality care.

Hospital organizations have argued that when unchecked, doctor-owned facilities select the more profitable patients, leaving community hospitals with burden of unprofitable emergency or charity care.

Thirty-six states and the District of Columbia have CON laws. Massachusetts is among about a dozen states that amended statutes in the past year because of the cost and access debate.

The changes were intended to "level the playing field" between hospitals and doctor-owned surgery centers, said Paul I. Dreyer, director of the Bureau of Health Care Safety and Quality at the Dept. of Public Health. "What this is doing is taking private corporate decisions that affect the public in major way into the public arena ... where all of these [access to care] concerns are taken into consideration."

But the system provides only a Band-Aid solution to long-term-access issues, said Linda K. Rahm, president of the Massachusetts Assn. of Ambulatory Surgical Centers.

The new rules will allow approved single-specialty surgery facilities to accept Medicaid patients for the first time. Because the centers were exempt from the CON process, they were not eligible for state licensure and, as a result, could not treat Medicaid patients. But the rules could stymie growth of important new facilities, Rahm said. They also continue to ban multispecialty centers.

"If we want to provide less costly and more affordable quality care, we should be looking at alternative options, and we are limiting those options through the whole determination-of-need process," she said.

The Massachusetts Medical Society has not taken a position on the issue. President Bruce S. Auerbach, MD, said MMS supports state efforts to curb costs and cut unnecessary duplication of services.

"As long as we continue to look at small pieces of the health care system, there's more work to be done," Dr. Auerbach said. "We should be taking a look at the broad needs of the population and make sure we can provide access and respond appropriately with available technologies."

The Massachusetts Hospital Assn. supported the changes but recommended monitoring. "It's important for the state to make sure there are enough resources committed to keep the process moving expeditiously and to ensure that access is maintained," MHA counsel Anuj K. Goel said.