Tag Archives: North Carolina CON Law

Lowering Healthcare Costs

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The hospital lobby is alive and well in America. In North Carolina they have so far successfully opposed the full repeal of Certificate of Needs (CON) Laws despite the matter being brought before the state legislature almost every year. I am sure we are going to hear from them about the latest rule change that President Trump has made to medical billing.

On Monday, The Daily Signal posted an article about a move by the Trump administration to lower healthcare costs.

The article reports:

Currently, doctors can charge Medicare recipients twice for exams during same-day services. The exam fee is called an “evaluation and management fee” and can cost more than $235.

For example, during a Medicare recipient’s standard dermatology exam, the doctor can charge the recipient twice for an exam of a mole if the removal service is performed on the same day. This is a common form of Medicare double billing among health care providers.

In a recent audit by the Department of Health and Human Services, the Office of the Inspector General found that 42% of Medicare beneficiaries were double-billed for intravitreal injections during eye exams, a recurring procedure. The same-day exam and procedure allowed the claims to bypass the system designed to prevent improper payments.

California and Florida are the top two states, with roughly 10 million Medicare beneficiaries combined, to benefit from this rule change. It is expected to take effect in January, just after the midterm election.

The proposed rule was announced in July and was open for public comment through mid-September. Now, the Centers for Medicare & Medicaid Services is evaluating the public comments and will soon announce the finalized rule.

The American Hospital Association is obviously opposing this move.

The article notes:

The proposed rule was announced in July and was open for public comment through mid-September. Now, the Centers for Medicare & Medicaid Services is evaluating the public comments and will soon announce the finalized rule.

The proposed rule suggested cutting the initial exam fee to 50% from 100% and keeping the final exam and procedure fee at the standard 100% charge. While the Trump administration has supported the rule change, Medicare providers and beneficiary associations have opposed the rule, claiming it would cause “fragmented care and reduced access for patients.”

It’s time to consider the consumer as well as the provider. Keep in mind that the more money that flows through government agencies, the greater chance of corruption.

One Way To Keep Medical Costs Down

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The News & Observer, a newspaper located in Raleigh, North Carolina, posted an editorial yesterday about one rather obvious way to lower medical costs in North Carolina. It is an easy solution–except for the fact that there are corporate interests who do not like this solution.

The editorial explains:

One important element of the budget recently passed by the N.C. Senate would lower health care costs by reforming North Carolina’s Certificate of Need law and increasing the number of same-day surgery centers across the state.

Currently, North Carolina has one of the most restrictive CON laws in the nation. The Senate proposal would save patients about 40 percent in costs when centers are allowed to be built.

Certificate of Need laws started in the 1970s with the goal of keeping hospitals from overbuilding facilities and acquiring unnecessary hospital equipment – both actions thought to increase costs for consumers. Unfortunately, these CON laws ended up essentially increasing costs because competition was eliminated. In 1987, the Reagan administration recognized that CON laws were a bad idea and spoke out against the federal mandate for CON. States began to repeal CON restrictions.

Today, 71 percent of all surgeries are outpatient or same-day surgery. Of those surgeries, too many – 72 percent – are performed at the highest-cost hospital system facilities.

One very basic example of an outpatient clinic that saves time and money and improves the quality of medical care is in the area of cataract surgery. As our population ages, many Americans face cataract surgery. With today’s medical practices, this is generally very simple and uncomplicated surgery. It is very easily done at an off-site medical facility. In Massachusetts, Surgisite Boston is a facility used by 70 ophthalmologists from throughout the region. The center aims to best serve both patients and physicians by acting quickly to adopt new technologies and create a comfortable, accessible environment for treatment. Having the center outside of the hospital cuts the costs for patients, and because of the specialized nature of the center, allows for the newest technologies. It also allows the surgeons to share the cost of the latest equipment and to offset that cost by having the equipment used every day.

The editorial explains other aspects of the debate:

The Federal Trade Commission staff supports CON reform in North Carolina that allows the freedom to build independent, nonhospital surgery centers that lower costs. The FTC states that “CON laws raise considerable competitive concerns and generally do not appear to achieve their alleged benefits for health care consumers” and that “CON laws can restrict entry and expansion, limit consumer choice, and stifle innovation.”

Cost analysis by Blue Cross Blue Shield NC shows patients across the state are paying way too much – sometimes more than double what others are paying – for many surgical procedures:

▪ An ACL repair by arthroscopic surgery in the Charlotte area cost $9,710 at a nonhospital ambulatory surgery center in Concord while the same procedure cost $29,565 at a hospital-run outpatient facility in Charlotte.

So what isn’t the introduction of surgical centers in North Carolina an easy solution to rising health care costs? Unfortunately hospitals like having a monopoly on surgical procedures. Hospitals are telling their employees that if surgical centers are built, the employees will lose their jobs. This is not true, but unless an employee actually takes the time to investigate what surgical centers will do, they will oppose the centers in order to keep their jobs. During a recent visit to Raleigh, one of our state legislators showed me the pile of mail he had received opposing changes to the “CON” law. Oddly enough, much of the mail opposing the changes came in business envelopes with hospital return addresses printed on them. There were two significant piles of mail from people who worked for hospitals who feared losing their jobs.

Changing the “CON” law should be an obvious thing to do. However, when hospitals have a monopoly on surgical procedures both simple and complex, they are reluctant to give up that monopoly. Unless the healthcare consumer becomes more aware of why healthcare costs are rising, things like the “CON” laws will continue to stifle competition in medicine. It is up to the consumer to help fight the monopoly that prevents North Carolina from having the surgical centers it needs.