Public hearing on proposed healthcare industry regulatory reforms finds mix of support, opposition

SHAHRZAD RASEKH / CT MIRROR Waterbury Hospital

Write a Comment

With the approval process for Yale New Haven Health’s bid to acquire Waterbury, Manchester Memorial and Rockville General hospitals dragging on for 17 months, proposals to change the regulatory process were presented during a public hearing Monday.

The General Assembly’s Public Health Committee held a hearing on six raised bills, including two — Senate Bill 440 and House Bill 5316 — focused on the Certificate of Need (CON) process.

The CON is the regulatory process through which healthcare providers seek approval for major changes, including mergers and acquisitions or significant capital investments in equipment or facilities. Complaints that the process takes too long prompted the proposed changes.

YNHH’s $400 million bid to acquire Waterbury HEALTH and Eastern Connecticut Health Network (ECHN) has dragged on for nearly 482 days since its CON application was filed on Nov. 22, 2022.

By comparison, according to data published by CTMirror.org, Hartford HealthCare’s acquisition of Charlotte Hungerford Hospital in Torrington took 351 days to have its CON approved, while YNHH’s deal to acquire Lawrence & Memorial Hospital in New London took 337 days.

SB 440 proposes requiring a final decision within 30 days from the date the CON application is deemed complete, and that if a decision is not issued, the application “shall be deemed approved.”

More than 90 people presented testimony on the six bills addressed by Monday’s hearing, with 22 people testifying on one or both of the CON-related bills, including several who testified in support of one bill and in opposition to the other.

One example of that was testimony submitted by Deborah Weymouth, the newly appointed president and CEO of Waterbury Health as well as of ECHN, which operates the hospitals in Manchester and Rockville. Weymouth spoke in support of SB 440, but against HB 5316.

In support of the senate bill, Weymouth cited recent examples of CON processes that ECHN was involved in that “took an unreasonable length of time, created excessive administrative burdens, and disrupted our ability to plan and implement strategies to improve access and operational efficiencies.”

A CON application to establish a diagnostic cardiac catheterization lab at Manchester Memorial Hospital in partnership with St. Francis Hospital took 17 months from the filing to a final decision, which was followed by an appeal in court. Another CON application, with ECHN seeking to consolidate its hospital licenses as a satellite campus of Manchester Memorial, took more than 29 months for a decision; the application was denied.

The CON process, she said, “should be a patient-centered process to support world-class healthcare and economic competitiveness in Connecticut.” She added that the current process creates “barriers to healthcare access and affordability and hamper economic growth.”

SB 440, she said, takes “significant steps” toward improving the process, including streamlining it, adopting efficient timelines, providing automatic approval if deadlines are not met, creating an expedited review process, and transferring responsibility for the cost and market impact review from the Office of Health Strategy (OHS) to the attorney general’s office.

At the same time, Weymouth said ECHN and Waterbury Health oppose HB 5316 because it would “dramatically increase the scope of CON” by requiring approval for additional types of physician group and personal service agreements (PSAs) between a health system or hospital and a physician.

“The recommendation to require CON restrictions on hospital PSAs of eight physicians or
more is an unreasonable administrative burden that creates unnecessary work,” she said, adding that such restrictions would “unfairly target community hospitals,” making it even more difficult to recruit specialists.

Stamford Health’s opposition

Ann Hogan, senior government relations officer for Yale New Haven Health, and Vincent Capece Jr., president and CEO of Middlesex Health, also submitted testimony for SB 440 and against HB 5316, for reasons similar to those cited by Weymouth.

Kathleen Silard, president and CEO of Stamford Health, however, submitted testimony opposing both bills. Silard said her organization “strongly opposes” the provision in SB 440 that exempts cardiac catheterization and cardiac surgery from the CON process because it would “critically lower Connecticut’s current high standard of the quality of such care.”

“We would have grave concerns if low-volume cardiac care proliferated across the state, which is a foreseeable consequence if there were no CON process for such care,” she said.

She said Stamford Health also opposes provisions that would remove the requirement for a CON when a healthcare facility is relocating within a municipality; a proposed exemption for a facility that wants to increase its capacity for existing services “without regard for what the service is;” and a proposed exemption for increasing a facility’s operating rooms “without regard to what the facility or the operating rooms are.”

Silard adds, however, that Stamford Health supports portions of the bill that would make the CON process more efficient and “CON decisions timelier.”

Stamford Health opposes HB 5416, she said, because it would “dramatically increase the scope” of the CON law, particularly as it applies to PSAs with physicians.

AG weighs in

State Attorney General William Tong also addressed the committee, raising concerns about SB 440’s provision to transfer responsibility in the CON process for cost and market impact reviews from the OHS to the attorney general’s office.

Tong opposes that change, stating he “would respectfully request” that the legislature consider strengthening the state “notice of material change” statute, which was approved in 2014, “when the healthcare provider landscape looked very different,” he said.

The notice of material change statute was approved at a time when many physician group practices were being bought up by large hospitals and healthcare systems, which often imposed new fees, Tong said. The state statute was one of the first nationwide to require pre-merger notification for such transactions, he said.

“In the past decade, the types of transactions involving healthcare players have changed, putting Connecticut at a disadvantage, because our (notice of material change) statute was passed a decade ago,” he said. “In order to protect patients and consumers, we need to really and truly know who is buying these key healthcare facilities that we all depend on.”

Tong said he and Senate President Martin Looney (D-New Haven) together propose a “set of tailored updates” to the NOMC statute, along with other reforms “aimed at protecting consumers.”

As for altering the CON statute, Tong and Looney suggest removing the presumption in favor of approving an application when it involves the transfer of ownership of large group practices; requiring CON reviews for all practice transfers of ownership, regardless of size; and “expanding the antitrust remedies available to the state to include disgorgement of profits made as a result of illegal or wrongful anti-competitive conduct.”

GOP response

Ahead of the public hearing, a group of Republican senators — including Sen. Republican Leader Stephen Harding of Brookfield; Sen. Heather Somers of Groton, ranking member on the Public Health Committee; Sen. Jeff Gordon of Woodstock, a doctor who serves on the Public Health Committee; and Sen. Ryan Fazio of Greenwich — issued a statement on the proposed reforms.

“Protecting access to affordable health care in Connecticut is neither a Democrat nor a Republican issue” the joint statement said. “It’s a common sense issue. We have all seen the mismanagement of Manchester, Rockville, and Waterbury hospitals by Prospect Medical Holdings. We must pass policies to improve oversight over healthcare acquisitions while improving access to care, particularly in rural areas.”

It urges the state to “reform the Certificate of Need process to reduce barriers to the expansion of access to health care” and pass policies that “boost transparency.”