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June 18, 2024

Plans to reform CT’s health care oversight failed. Now what?

SHAHRZAD RASEKH / CT MIRROR Sen. Saud Anwar speaks at a rally at the state Capitol to preserve Manchester Memorial Hospital, Rockville General Hospital and Waterbury Hospital.

Lofty plans for a major redesign of Connecticut’s “certificate of need” program” — a regulatory effort that requires providers to obtain state approval before making substantial changes in the health care sector — dissolved in the final weeks of the legislative session as health officials failed to reach consensus with state leaders and differing views of how the program should evolve took hold.

None of the four bills aimed at overhauling certificate of need had come up for a vote when the session concluded May 8, but proponents of those changes vowed to revisit the issue next year — albeit with more preparation and reflection.

Legislators had proposed a range of amendments, from reduced timelines for decisions on mergers, acquisitions and other maneuvers, to added scrutiny for certain investments in health care by private equity companies. They also suggested waiving CON approval for services such as the expansion of psychiatric units and care in rural areas.

Some key lawmakers put the blame on the state’s Office of Health Strategy, saying members of the office weren’t present at the Capitol and tried to make complicated changes too late in the session. Others said hospital and other medical officials did not favor amendments raised by legislators and Gov. Ned Lamont’s administration.

But many agree the stakes are high and the need for reform is imminent, given the volatile nature of some health systems. It took more than a year for the state to approve Yale New Haven Health’s proposed acquisition of three Connecticut hospitals owned by Prospect Medical Holdings, drawing criticism from patients, local leaders and workers at those facilities. Despite the approval, Yale and Prospect are still battling over a purchase price.

“No matter if we have five years or four months or six months to do it, there will be divisions, because in every decision that’s made, there are going to be people who feel their power is compromised,” said Sen. Saud Anwar, co-chair of the legislature’s Public Health Committee, which moved the bills to the House and Senate floor.

“Even if we had passed part of a bill, it would have been better. In the end, our conversation was, are you willing to accept the status quo, or do you think we can move in the right direction? The thought was we could work to move in the right direction, but it was almost like, how far should we go? Can we push forward or not? That’s where the challenge developed.”

What happened?

Who bears responsibility for the collapse of plans to overhaul certificate of need depends on whom you ask.

House Speaker Matthew Ritter, D-Hartford, and Majority Leader Jason Rojas, D-East Hartford, said at a late-session press conference that trust between the hospitals and Lamont’s administration had broken down and that future bill negotiations must be led by lawmakers.

Ritter said representatives of the Office of Health Strategy weren’t often present at the state Capitol and approached legislative leadership late in the session requesting big changes.

“They have a habit of coming to my office with 100-page bills with less than seven days remaining in the session,” he said in an interview. “Santa Claus and the Tooth Fairy combined don’t have the power to make that work.”

Not all legislators agreed that OHS hampered the process.

“The Public Health Committee had a lot of good conversations with OHS. And we had separate conversations with the hospital association. We didn’t get to all talk together, which is probably something that we will need to do,” said Rep. Cristin McCarthy Vahey, D-Fairfield, co-chair of the committee.

Deidre Gifford, commissioner of the Office of Health Strategy, said certificate of need reform for years has been plagued by divisions, but she described the process this year as cordial.

“While there is agreement around certain elements of change, a lot of things that maybe were extraneous to the core changes get added in. And those kinds of extraneous things might be particular to one stakeholder and can cause a lot of challenges with getting widespread support,” she said.

Still, Gifford added: “We’ve spent many, many hours working with legislators this session. And we were very close. In fact, we had a lot of bipartisan consensus on where the amendments were going to land.

“Significant discussions on proposed legislation related to the CON process took place throughout the session with multiple stakeholders. Those discussions did result in negotiated proposals that were brought forth in an effort to achieve positive results before the session’s end.”

Legislators and health officials agree the program needs a refresh. But suggestions for how to improve it were, at times, diametrically opposed.

Several lawmakers, for example, wanted to give the Office of Health Strategy more power to prevent hospitals from cutting services. Others, including legislators and the Connecticut Hospital Association, wanted to streamline the application process by shortening timelines and cutting down the list of changes that require a certificate of need.

“It’s a juggling act,” McCarthy said of reconciling the various viewpoints.

Ultimately, the 13-week session didn’t offer enough time to work through the web of interests surrounding the issue, she said, though the committee made progress toward compromise.

“I think we got close,” she said. “Those loaded issues are very difficult to do at the end of session, unless you have come to a negotiated agreement. And we just couldn’t quite get to that.”

Legislators agree that certificate of need will come up again next session, but some want to take a step back to gain consensus on what the goals of the program should be.

“What do we really need to do?” said Rep. Tammy Nuccio, R-Tolland. “For me, everything goes back to accessibility and affordability.”

Sen. Ryan Fazio, R-Greenwich, said he’s focused on identifying opportunities to roll back regulation, pointing to research that certificate of need programs around the country have mostly failed to limit spending or improve quality and access.

“In the long session, I think that’s a ripe opportunity to roll back some of this red tape that’s hurting patients,” said Fazio.

Jim Iacobellis, senior vice president of government and regulatory affairs for the Connecticut Hospital Association, said the timelines for CON approval are the most pressing issue.

“The most important piece was to fix the timelines and ensure certificate of need applications don’t take as long as they have been taking,” he said. “We are disappointed we didn’t see significant certificate of need reform this session.”

Efforts to amend the program next session will only be successful if legislators, the industry and the administration come together in advance to have preliminary conversations, McCarthy Vahey added.

It will be critical to get OHS, the hospitals, the attorney general’s office and legislative leadership in the same room, which failed to happen this year, she said.

House Minority Leader Vincent Candelora, R-North Branford, said lawmakers need to educate themselves on the process and hear all perspectives.

“If people go in with preconceived notions of how they’re going to fix the system without listening to the stakeholders, that’s how it breaks down,” he said. “Since I’ve been in the legislature, this is an issue that’s been talked about. All of us were frustrated it didn’t get over the finish line this year. I think it’s certainly going to get resurrected.”

What happens next?

Absent legislative changes, OHS officials said they are making tweaks on their end to ensure a smoother certificate of need process.

The office is revising its application form and guidebook “with an eye toward making them as clear as possible,” Gifford said.

“Sometimes a back-and-forth of information during the application process can prolong the timeline unnecessarily,” she said. “So, if we start out with real clarity on what’s being asked, we’ll be able to make the program more efficient.”

The Connecticut Mirror compiled and analyzed all CON applications that resulted in a decision between January 2018 and April 2024, excluding any that were withdrawn or still in review. In that time, the state has ruled on 115 applications in total. The median number of days from application submission to decision was 234, or roughly seven and a half months.

The CT Mirror’s analysis found that applications for the establishment of a new facility or service take the longest, with a median of 378 days from the time a provider submits an application to the day the agency issues its decision. In comparison, terminating a service took a median of 211 days. Applications to acquire new equipment, such as a CT or MRI scanner, took a median of 251 days.

Gifford has acknowledged the timelines are long, but said that especially for complex applications, it can take time to conduct a thorough review. There has been a “steep decline” in the timelines in recent years as the agency increased staffing and worked through a backlog of applications brought on by COVID, she said.

An analysis OHS conducted of its own timelines shows a 60% decline in the median number of days to process an application between 2021 and 2023. The office had vacancies in more than half of its CON positions during the height of the pandemic and immediately after but has since filled many of the jobs and added new positions.

Gifford said recently the office has “almost fully staffed that program” and is seeking one more attorney.

OHS has implemented pre-application meetings with people seeking a certificate of need to help them understand the criteria used for evaluation. It also has created a dashboard so applicants can track where they’re at in the process.

“All the work that’s underway, it’s paying off,” Gifford said.

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