A new federal report is suggesting getting rid of certificate of need requirements for nursing homes to help fuel more choice and competition in the field.
Health and Human Services and the Treasury and Labor departments issued the recommendations on Monday in response to a presidential request. In the 119-page report, officials noted that CON requirements are often “costly barriers” to entry for providers, rather than successful tools for controlling costs or improving quality.
Fifteen states have already eliminated CON requirements altogether, and both the FTC and Antitrust Division of the Justice Department have previously recommended their abolishment, report authors state.
“Available evidence suggests that CON laws have failed to produce cost savings, higher quality healthcare, or greater access to care, whether in underserved communities or in underserved areas,” the report states.
The report also makes several other recommendations to boost healthcare competition. Those include broadening providers’ scope of practice and improving the mobility of the workforce; expanding access to health saving accounts; and developing price transparency initiatives.
Nursing home advocacy groups did not have comment on the report when contacted Tuesday. The American Hospital Association said in a statement that after an “initial read,” it was “pleased” with several of the proposals, with a few caveats.
Long-term care policy expert and Harvard professor David Grabowski has previously advocated for the elimination of CON requirements for nursing homes, arguing that they “constrain bed growth.”
“Moving forward, states should repeal their certificate-of-need law for nursing homes to encourage greater innovation in the care of older adults. This will lead to better access to services and improved quality and price competition in the market for nursing home services,” Grabowski wrote in Health Affairs last year.
It is unclear what an elimination of certificates of need would do to nursing home occupancy rates, which have hit record lows recently in numerous successive quarters, according to statistics from the National Investment Center for the Seniors Housing & Care Industry.