North Carolina hospitals should lose their legal protections against too much competition, state lawmakers proposed Tuesday in a bill that could affect negotiations over an effort to expand Medicaid.
The state General Assembly is expected to continue its debate in 2023 over whether to expand Medicaid to hundreds of thousands of the state’s working poor.
At the center of the debate are disagreements between the Republican leaders of the state House and Senate, who are open to expanding Medicaid but haven’t seen eye-to-eye on the details.
Tuesday’s bill would repeal North Carolina’s “certificate-of-need” rules. Those allow state regulators to limit how many hospitals can operate in any given area, and even what types of equipment they can buy.
Hospitals have said those rules help keep costs for patients down, by restricting spending on expensive equipment or expansion projects that they don’t really need.
Opponents, however, say that letting government workers regulate the market is against free market principles — and actually makes costs increase, not decrease, because hospitals have no competitive pressure to charge less.
“Any changes to certificate of need law should consider the current and near-future operating environment for hospitals and health systems,” Cynthia Charles, a spokeswoman for the North Carolina Healthcare Association, said in a statement.
High inflation and workplace shortages have elevated expenses, contributing to thin or negative margins for some member hospitals, she said. “Legislative leaders may want to be careful not to implement policy that could unintentionally damage access to healthcare services in local communities, especially safety-net services that North Carolinians rely on,” Charles said.
The bill’s sponsors, Republican Sens. Joyce Krawiec, Jim Burgin and Kevin Corbin, couldn’t immediately be reached for comment.
Republican leaders in the state opposed Medicaid expansion for years. But last year, Senate Leader Phil Berger announced he now supports it. Many other Republican lawmakers soon followed suit.
After that about-face, a key sticking point became the desire among Berger and other Senate leaders to use Medicaid expansion to also gut the certificate-of-need laws, as well as to pass other big policy changes such as allowing nurses with advanced training to perform certain duties without a doctor’s supervision.
Tuesday’s bill isn’t guaranteed to get a vote, even despite having some of the top Republican senators as lead sponsors. It will first have to pass committee hearings, and a similar bill last year with many of the same sponsors never made it out of committee.