CON law changes spark concern

HMCH CEO Paul Hammes speaks Wednesday about the changes that could affect hospitals in the proposed North Carolina budget.

NCHA Advocacy Coordinator Emily Roland offers information and handouts to community members joining the letter writing campaign.

A special meeting was held Wednesday at Hugh Chatham Memorial Hospital, encouraging staff and members of the community to make their voices heard in a letter writing campaign to state legislators.

The concern from HCMH was raised when the state Senate’s recently released budget proposed deep cuts to hospitals, including a repeal of the Certificate of Need law, which regulates the growth of healthcare services and facilities across the state. According to Member Advocacy Coordinator for the North Carolina Hospital Association Emily Roland, a repeal of the CON law would have negative consequences on the affordability of inpatient-sensitive services to employers and consumers statewide.

“Our legislators make important decisions that affect our government but also directly impact the health of our local economy,” said HMCH CEO Paul Hammes.

Hammes’ concern for the local economy arises from the change in CON laws allowing for-profit medical providers to open facilities that accept only patients with the ability to pay, leaving not-for-profit providers to cover the expenses from uninsured or under-insured patients.

“CON exists to make sure everyone has access to high quality health coverage,” said Hammes. “With the absence of CON, anybody can open a facility.”

According to information provided by the North Carolina Hospital Association, “North Carolina’s Certificate of Need law prevents other providers from taking profitable services that hospitals rely on to continue providing essential services in our communities. Repealing the law will not create what some claim will be a free market in health care, but it will eliminate hospitals’ ability to offset the losses we incur from the 16.7 percent who remain uninsured and those who are under-insured in our state.”

Hammes stated during the meeting that in 2014, HCMH forgave more than $20 million worth of health care either from bad debts or charity cases. “We see everyone, regardless of their ability to pay,” said Hammes.

Current CON laws require that, when a hospital or facility wishes to increase patient beds, open a new department or expand in any way, it must provide a certificate of need to the North Carolina State Health Department for approval, showing why it is necessary for the community to have those services. Some in smaller communities fear that the market could become saturated with unnecessary providers that appeal to only the private insured patients and leaving an already strained system to foot the bill for patients with little to no healthcare coverage.

An example given by Hammes included the state of Florida that has no restrictions on healthcare facilities. “You see MRI scanners on every corner,” Hammes exaggerated.

A partial or total repeal of the CON law could undermine the safety net providers need across the state who are required to treat medical patients regardless of coverage. Information provided by the NCHA states that hospitals depend on profitable services to help underwrite unprofitable, but essential, services such as emergency rooms, level 1 trauma programs, children’s hospitals, community benefit and medical education.

Another concern for hospitals from the proposed budget changes is the proposed significant lowering to the cap on not-for-profit sales tax refunds. In the past, this refund has helped to provide a reimbursement to hospitals for the critical services they provide. Statewide, the change in the sales tax refund could result in a $149 million loss, according to the NCHA.

According to Hammes, last year HCMH received $800,000 in sales tax refunds due to its not-for-profit status, a refund that is necessary but would be eliminated under current proposals. “If the cap decreases, we lose millions in sales tax refunds,” said Hammes.

Hammes and other members of the staff are asking employees and members of the community to join in with citizens of North Carolina to share stories and concerns over the proposed budget changes. “We’re asking you to join us in creating a unified voice with thousands across North Carolina,” said Hammes. “The Yadkin Valley Chamber of Commerce recently wrote a letter that indicated they do not support changes.”

“Legislators need to hear from their constituents,” said Roland. “They need to hear about the great work you’re doing at the hospitals and how that can be threatened.”

The state has extended the budget for 45 days before making major changes, giving them a deadline of mid-August before official changes may occur. Concerned members of the community are encouraged by local hospital staff to vocalize their opinions through letters to their legislators, Sen. Shirley Randleman and Rep. Sarah Stevens.

For more information from the NCHA, or to submit a letter online, visit

Karen Holbrook may be reached at 336-258-4059 or on Twitter @KarenHolbrook00.

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