ATLANTA – A plan to change how Georgia regulates health care services – while also requiring much more transparency from the state’s nonprofit hospitals – was rejected Thursday.

The proposal was backed by several high-profile legislators who sought to update a decades-old program called certificate of need, or CON, which regulates how many health care facilities can pop up in any given area with the goal of controlling health care costs.

But that powerful support was not enough to win over those wary of the impact to their hospitals back home. The measure was defeated in a 72-to-94 vote, with several Republican lawmakers joining Democrats in opposition.

“It will be back,” the bill’s sponsor, Rep. Matt Hatchett, a Republican from Dublin who chairs the majority caucus, said in an interview Thursday evening. “We’ve invested our energy up to this point and we’re going to listen and take up some more parts of the bill and see if we can’t start the process to modernize certificate of need because I really firmly believe in that.”

Hatchett was mum on where he would likely have to make more concessions to garner the support he needs. Thursday was this legislative session’s Crossover Day, which is when a bill has to pass out of at least one chamber to have the clearest path to becoming law.

Certificate of need is seen as a protection from the threat of a new facility swooping in and poaching insured customers seeking more profitable services. In rural areas of state, the program is often seen as vital armor for fragile small-town hospitals.

But critics say the program thwarts competition and drives up the cost of health care.

The bill that failed Thursday had sought to loosen up those regulations while limiting which facilities can object to another facility’s proposed construction project, request for new health care services or other desired change.

“It is not fair for a hospital in Waycross to object to someone in Ringgold wishing to add a service. It is not fair for that hospital in Ringgold to object to someone in Thomasville wanting to add a service,” said Rep. Terry England, a Republican from Auburn, referring to cities in opposite ends of the state.

It would also beef up transparency rules for nonprofit hospitals, requiring them to publish online financial statements, salary information for their top staff and other public information.

“Our people need to know the financial stability of our hospitals,” Hatchett said. “And we’re just trying to make sure that we all know how good or bad those finances are.”

The measure would have also given hospitals something they desire: an additional $40 million for the popular rural hospital tax credit program, bumping the cap up to $100 million. The program gives donors to eligible hospitals a dollar-for-dollar income tax credit.

State lawmakers had originally sought to make sweeping changes to how Georgia regulates health care services. The original proposal would have completely repealed certificate of need and replaced it with a licensing program.

But that more ambitious plan faced insurmountable opposition from the state’s hospitals and others who issued dire warnings that the changes would threaten the stability of the state’s hospitals.

After weeks of debate, lawmakers abandoned the call to abolish certificate of need and instead settled on updates to the program, which has still attracted opposition. A TV ad from a group called Save Georgia Healthcare has aired a TV ad opposing the measure.

“My folks at home don’t have $2 million to put ads on TV to lobby against something,” Rep. Penny Houston, a Republican from Nashville who has been heavily involved in the legislation, said to her colleagues.

“The only lobbyist they have is me and I have to stand up for them. And my folks need help and CON has not helped us,” Houston said. “It is absolutely ridiculous if you think CON has helped rural Georgia. It has not.”

The setback Thursday will likely cause proponents to further scale back their ambitions, but it remains to be seen just how.

Rep. Dexter Sharper, a Democrat from Valdosta, was one of the dozens to vote against the measure. He said he was concerned about some of the exemptions included, such as a special carve-out for Cancer Treatment Centers of America in Newman.

“If there’s a problem overall, let’s address the overall problem,” Sharper said. “I think we need to address the big picture.”


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