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South Carolina’s lawmakers repealed the state’s certificate of need for healthcare facilities, except in the case of nursing homes – a befuddling decision, according to one sector CEO.

The legislation sailed through both legislative chambers, and Gov. Henry McMaster (R) has said he will sign it. The bill sunsets certificates of need (CONs) in 2027 in all but eight counties that are currently without a hospital. In those areas, the CON will immediately disappear, according to local reports. 

Left out of the measure, though, were nursing homes, which will still need to comply with CON requirements before expanding or adding capacity or opening new facilities. 

“Skilled nursing should have been included, and I don’t know why that was excluded,” David S. Buckshorn, CEO of Wesley Commons, told McKnight’s Long-Term Care News on Tuesday.

The long-term care facilities need to evolve to meet the needs of residents and patients who today  have more choices in aging services, he added. Since the 1970s, the per capita utilization of skilled nursing has declined, he explained, putting the onus on the industry, lawmakers and regulators to keep the sector and its physical facilities relevant. 

“If we regulate these environments to death, it doesn’t matter if you have a certificate of need or not,” Buckshorn observed.

Killing the program

Lawmakers in South Carolina had pushed to end the CON program, which began in the 1970s after Congress took action to withhold federal dollars to states without strict requirements. Although lawmakers ended the federal program about a decade later, many states kept their programs in place. 

A report from the National Conference of State Legislators issued Jan. 1 found that 35 states and Washington, DC, had “some form” of CON program and that as of 2022; 12 states had fully repealed their rules.

In South Carolina, lawmakers said the certificates promoted healthcare monopolies, which can drive up costs. 

Others, however, have said removing CONs requirements could do “real harm.”

McKnight’s Long-Term Care News first reported on Florida’s attempts to repeal the program in 2019. The state was finally successful in 2021. 

“Repeal of certificate of need requirements in other states has done real harm to eldercare there,” Florida Health Care Association Executive Director J. Emmett Reed said in 2019. “Indiana saw new centers being built but beds going unfilled, which put a significant financial strain on the state’s Medicaid budget. The state had to force nursing centers to close as a result and ultimately had to reverse its CON repeal initiative. CON also contributed to Texas facilities experiencing empty beds and poor levels of care.”

Earlier this year, McKnight’s Senior Living reported on legislation in Iowa that would set a six-month moratorium on nursing home construction and expansion. The Iowa Health Care Association supported it. According to IHCA President and CEO Brent Willett, the pause would “allow time to research and modernize Iowa’s skilled nursing facility bed need formula.”