Time’s running out on bill to restore ‘certificate of need’ process for hospitals

A push to curb hospital construction in Indiana by bringing back the “certificate of need” review process appears doomed for this legislative session, but the issue of rising health care costs could be headed to a summer study committee.

With just three days remaining until the Indiana Senate’s deadline to pass legislation out of committee, the bill is not even scheduled for a vote. The Senate Health and Provider Services Committee’s last meeting is set for Wednesday, one day before the deadline.

Seven other bills are scheduled to be heard by the committee on Wednesday, but not Senate Bill 573, which would require the state Department of Health to review any plans to build new hospitals to see if they are truly needed.

The bill got a hearing last month, but the issue didn't come up for a vote before the panel. Sen. John Ruckelshaus, R-Indianapolis, the bill’s main author, said the bill is dead, but the issue will remain alive.

"Frankly, we didn't have the votes to move it forward at this time," he said. "Some issues need to ripen. I think because we had not had a certificate of need for some time, the members were hearing some confusion back in their districts. Some of the hospitals were for it, but a lot were against it."

He told IBJ in December that he was concerned about the flurry of hospital construction in Indiana, particularly near wealthy neighborhoods, and how that might be driving up the cost of care.

Hospital costs in Indiana are among the highest in the nation, while occupancy for inpatient beds at many hospitals is about 60 percent.

Under Ruckelshaus’ bill, the review process would have applied only to new hospital projects, not to additions at existing hospitals or the purchase of expensive hospital equipment.

Indiana repealed the certificate of need process in 1994, but last year passed a law requiring that new nursing-home projects get a certificate of need, with a few exceptions, such as for certain religious or fraternal organizations operating facilities mainly for members.

The Indiana Hospital Association opposes a move to reinstate the certificate of need process for hospitals, saying there’s no evidence that it reduces costs, and instead could increase bureaucracy, legal costs and health care costs.

Ruckelshaus has said his bill was prompted by residents near the intersection of Spring Mill Road and West 96th Street in Carmel, where St. Vincent Health recently bought 30 acres for an unspecified project.

St. Vincent has not said what it plans to build there, but some of the neighbors fear it could include a large, full-service hospital, with a 24-hour emergency room, a trauma center and helicopter landing pads.

To keep the issue alive, Ruckelshaus has introduced another piece of legislation, Senate Bill 8, that would study the growth of health care costs through hearings at an interim study committee later this year.

The committee would look at current trends in health care delivery, access to health care in rural areas, the drivers of health care cost increases, social determinants of health and the rate of the uninsured on health care costs.

The study committee would report the results of the study, and any recommendations, by Nov. 1. The Senate Health and Provider Services Committee voted Feb. 14 to adopt the bill. The next step is a vote from the full Senate.