Florida last week repealed the Certificate of Need process once required to build new hospitals or add medical services, but officials left in place pre-approval rules for nursing homes and other facilities.

The final outcome was a victory for the Florida Health Care Association, which “strongly advocated” against killing CONs for long-term care providers.

“We believe CON repeal would do real harm to eldercare in our state,” spokeswoman Kristen Knapp told McKnight’s. “Today, we have managed growth where there is a demonstrated need for more beds, especially in rural and underserved areas. We believe that repealing nursing home Certificate of Need will most certainly result in unmanaged growth, low occupancy rates, inefficiencies in how buildings operate, and a reduction in the value of our state’s nursing centers.”

CON programs have fallen out of favor in many places. In 1982, every state except Louisiana had a CON program with broad regulatory rules for hospitals, skilled nursing and intermediate care facilities, kidney dialysis centers and ambulatory surgery centers. But a federal model that initially sparked interest in the process was repealed during the Reagan administration.

Now, all but 16 states have since done away with CON entirely, according to a 2019 chart produced by the National Conference on State Legislators. Three states have replaced CON with similar approval programs. Other states have outright moratoriums on new nursing home construction.

In December, a federal report suggested any remaining states get rid of certificate of need requirements for nursing homes to help fuel choice and competition.

The report, a combined effort by the Health and Human Services, Treasury and Labor departments  from officials noted that CON requirements are often “costly barriers” to entry for providers, rather than successful tools for controlling costs or improving quality.

Florida’s Agency for Health Care Administration manages the state’s CON process. The agency charges nursing homes $10,000 per application, plus  .015 percent of the capital costs of the proposed project up to $50,000, according to a spokesman.

Florida last reformed its nursing home CON rules in 2014, and Knapp said the current process “strikes the right balance, enabling a greater number of individuals to receive care in their own homes rather than institutional settings.” She said 40 new nursing centers have created an additional 4,500 beds since 2014. 

But the state denied 64 applications from nursing homes, hospice centers and similar facilities from 2015 to 2018. Last year, it rejected 17 out of 30 applications. (No data on 2019 has been reported yet.)

The push to remove hospitals from CON stipulations was championed by Florida House Speaker Jose Oliva. It ultimately killed the application process July 1 for new general hospitals and tertiary services, such as cancer programs. A second round of repeals could follow in 2021 for specialty hospitals.