The Medicaid expansion deal includes a certificate of need changes

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Medicaid expansion in North Carolina

The House and Senate have agreed to pass Medicaid expansion, reaching a breakthrough after years of debate. North Carolina is one of just 11 states that has not adopted Medicaid expansion under the federal Affordable Care Act.

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The deal that would expand Medicaid health insurance coverage in North Carolina hinged in part on agreement to change a state law that determines where hospitals, clinics and other health care facilities are built.

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Top lawmakers in the House and Senate say they have agreed to allow construction or expansion of certain facilities without a “certificate of need” from the state Department of Health and Human Services. The facilities would include those that provide inpatient treatment of behavioral health problems and chemical dependence.

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Senate leader Phil Berger said the proposed changes to the certificate of need law were the most significant since it was put in place in the 1970s. The goal of the law was to try to control health care costs by avoiding a glut of hospital beds and medical equipment.

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Berger has been a vocal critic of the law, saying he thinks it increases costs and artificially reduces the availability of health care. He insisted on tying Medicaid expansion to reforms and called the agreement “a markedly positive step in the right direction.”

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Still, the changes announced March 2 are limited and appear aimed at assuaging North Carolina’s hospitals, who support Medicaid expansion but until September opposed any changes to certificate of need. The law helps reduce competition hospitals might face from each other and for the lucrative outpatient services that help underwrite other parts of their operations.

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That’s particularly true in rural areas, where small community hospitals are more dependent on those services to help cover other costs, according to the industry trade group. The compromise would eventually eliminate certificate of need requirements for MRI machines and ambulatory surgical centers but only in the fewer than two dozen counties with more than 125,000 residents.

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The N.C. Healthcare Association, which represents the state’s 130 hospitals, also said in September that it would support repealing certificate of need requirements for beds for psychiatric and chemical dependency patients.

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“We appreciated that it seems they took the input from our proposal from last fall into consideration,” the association’s spokeswoman, Cynthia Charles, wrote in an email. “We understand that reaching agreements such as this takes time and compromises to come up with terms to get things done. We are pleased by their effort to continue to protect access to care for all, especially in rural communities.”

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Berger, announcing the deal at a news conference alongside House Speaker Tim Moore, briefly outlined the proposed changes to the certificate of need law, which also include exempting equipment replacement and diagnostic centers that cost less than $3 million.

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The changes would not apply to other facilities, including nursing home and acute care beds, dialysis equipment and hospital operating rooms.

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Certificate of need remained a point of contention after Berger and Moore agreed to create a committee to study Medicaid expansion in late 2021. Berger insisted changes to the law be part of any expansion plan, while Moore said the issues should remain separate.

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Moore said the House and Senate reached the deal late on the night of March 1 and put the finishing touches on it the morning of March 2.

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this story was originally published March 2, 2023, 4:16 PM.

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Profile Image of Richard Stradling

Richard Stradling covers transportation for The News & Observer. Planes, trains and automobiles, plus ferries, bicycles, scooters and just plain walking. Also, hospitals during the coronavirus outbreak. He’s been a reporter or editor for 35 years, including the last 23 at The N&O. 919-829-4739, [email protected].

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