Maine Hospital Association,

MEMORANDUM

TO: Senator Joseph Brannigan, Chair
Representative Anne Perry, Chair
Members of the Health & Human Services Committee

FROM: Steven Michaud, President

DATE: May 14, 2007

RE: Testimony in Opposition to LD 1763, An Act to Amend the Maine Certificate of Need Law of 2002

Senator Brannigan, Representative Perry, and members of the Health & Human Services Committee, my name is Steven Michaud and I am the President of the Maine Hospital Association. The Maine Hospital Association represents all 39 community-governed hospitals which include 36 non-profit general acute care hospitals, 2 private psychiatric hospitals, and 1 acute rehabilitation hospital. Maine is one of only a handful of states in which all of its general acute care hospitals are nonprofit. In addition to acute care hospital facilities, our hospitals represent 19 home health agencies, 19 skilled nursing facilities, 17 nursing facilities, 8 residential care facilities, and 200 physician practices.

Let me begin by saying that the Maine Hospital Association is supportive of the Certificate of Need Program and has been for many years. Our opposition to this bill is limited to some of the sections and should not be seen as opposition to the program.

Section 1 expands the scope of projects that require a CON to include the replacement of major medical equipment that did not require a CON when it was originally purchased. This section also would require a CON if a hospital were to take over a service that was previously provided for under a contract. We object to this expansion of review authority and don't believe that replacing equipment should be subject to CON - especially if it is for a service that is already being provided at the hospital through a contractual arrangement that may have expired for whatever reason. I also note that the title of this section refers to "major medical equipment" while the new sections only refer to "equipment" and we ask that this entire section be specified as applying to "major medical equipment".

Section 5 changes the definition of related projects from "any projects that the Department determines are related" to "any expenditures that the Department determines are related". The current law in this area is unclear and very problematic to hospitals but yet this change does nothing to clarify it and actually makes it less clear. This section needs to provide for a more specific
definition of related project as opposed to changing projects to expenditure while not providing any additional criteria for the Department to use when determining related projects.

Section 6 expands the Commissioner's authority to undertake a subsequent review for expenditures on which the Department had granted a non-applicability ruling but then determined at some future date ought to have been reviewed. The provider acted in good faith when asking for an applicability ruling and the Department should not be able to change this decision after the fact - in some cases years later and after the investment has already been made.

Section 10 changes the law so that letters of intent and application materials are no longer subject to the State's Freedom of Access Laws. There is no reason to do this. Other providers and members of the public sometimes have a legitimate need to review this information and the all of the FOA laws should apply here.

Section 12 mandates that any reimbursement for a project be suspended if the commissioner determines that a CON has not met conditions imposed at the time of the CON being granted. Current law allows the commissioner to impose this remedy but does not make it mandatory. We suggest that suspending all reimbursement is disproportionate to a provider not meeting a CON condition and that the discretionary authority should remain with the commissioner as opposed to making it mandatory in all circumstances.

The reality is that none of these changes are emergency in nature as shown by the fact that there have been efforts in the last year to hold workgroup meetings to look at improvements in the CON process that are clearly necessary. For a variety of different reasons these workgroup meetings didn't happen but we believe that type of forum is a better way to work on improving the CON process. We also suggest that the issues in this bill be considered by the studygroup proposed in LD 1535 so that some of these complicated details could be worked on in that type of setting.

Thank you and I would be happy to answer any questions.

Advocacy