Senate Republican legislative leaders are trying again to push through a limited form of certificate-of-need regulatory changes during what could be the final stage of the session.

Those leaders, including Sen. Joyce Krawiec, R-Forsyth, applied the “gut and replace” strategy to House Bill 126 on June 27.

The bill initially was focused solely on adding human tissue as an option on state driver’s license donor listings. The bill passed the House by a 112-0 vote April 17.

The Senate Health Care stripped the donor language from the bill and inserted limited CON law exemptions that would affect psychiatric facilities, kidney disease dialysis centers, intermediate care facilities, chemical dependency treatment facilities and some continuing care retirement centers.

However, ambulatory surgical centers were not included, which have been at the heart of previous CON repeal or exemption bills in the Senate.

A CON is required before a health-care system or provider can build a facility, buy equipment or offer a surgical procedure, among other things. There are 28 health-care scenarios affected by the law, which took effect in 1978.

The primary goal is to prevent unnecessary duplication of services within a community or region as a means of controlling costs.

The inherent competitive limitations in the CON laws have helped fortify the revenue streams of not-for-profit health-care systems, such as Cone Health, Novant Health Inc. and Wake Forest Baptist Medical Center.

The Senate version of HB126 cleared the Health Care and Rules and Operations committee. It has been placed on today’s Senate floor calendar.

“CON reform is a must in order to provide greater access to health care and reduce costs,” Krawiec said.

“Currently, the process is so onerous, cumbersome and expensive that many are restricted from the market. The changes proposed in HB126 are common sense.

“Reducing health care costs and improving access should be a first priority for all of us. I think most agree that CON reform will achieve some of that,” she said.

If the Senate passes the current version of HB126, it would be sent back to the House for approval of the gut-and-replace changes.

Given the House has been reluctant in recent years to make changes to CON laws, it’s likely the House would reject the current version of HB126. That means the two chambers could enter negotiations over the two versions of HB126 or House leadership could choose to shelve the bill for the rest of the session.

Reducing the effectiveness of the CON law “is just a difficult bill for House members to embrace, so not sure it gets much traction,” said Rep. Donny Lambeth, R-Forsyth. Lambeth is a leading House health-care expert and a key House budget writer.

Opposing arguments

Krawiec said when introducing SB361 that “it’s time for us to change how restrictive North Carolina CON laws are.”

People in favor of repealing CON laws claim that adding competition, particularly from for-profit groups, would lead to the opening of a host of new services and facilities, including more acute-care hospitals, diagnostic centers and rehabilitation centers.

They say competition would force more providers to lower fees for high-risk procedures. Several cost-comparison websites have shown the costs of some of those procedures can vary by tens of thousands of dollars within a region.

“Those entities, already in the market, understandably don’t want competition,” Krawiec said. “Without competition, health care costs will continue to rise.”

CON supporters say ending the law would allow for-profit groups to cherry-pick the most profitable medical procedures, leaving not-for-profit hospitals to handle in their emergency departments more of the sickest of the sick, who often don’t have health insurance.

The N.C. Healthcare Association opposes repealing CON laws, saying they would cost thousands of health-care jobs statewide, including in rural communities. “At a time of significant change in health care in our state, we believe now is not the time to discuss changes to the law,” spokeswoman Julie Henry said.

Other bills

The makeover of HB126 comes a week after Krawiec agreed June 20 to have more extensive CON language removed via amendment in Senate Bill 361. That bill then cleared the Senate by a 48-0 vote

Krawiec said at that time the CON language “will be addressed in a separate bill.”

There are three other CON-related bills: Senate Bill 646, which would provide services exemptions from some CON regulations; Senate Bill 539, which would repeal CON laws; and House Bill 857, which creates an exemption from CON laws for ambulatory facilities.

None of those three bills has been heard in committee.

The initial version of SB361, introduced March 26, would have repealed the CON law, an effort that has been rebuffed by the House in previous legislative sessions.

A less-aggressive attempt of SB361 that would have taken steps to reform the CON laws, rather than an outright repeal, was submitted June 12.

Language creating the CON exemptions also was included in the Senate’s state budget proposal, but removed from the state budget compromise.

Get today’s top stories right in your inbox. Sign up for our daily morning newsletter. 336-727-7376 @rcraverWSJ