On April 29, 2019, the Florida Legislature passed House Bill 21 (largely along party lines), which repeals the state’s certificate of need (CON) laws with respect to general hospitals, specialty hospitals, and tertiary services.¹  Pursuant to the bill, general hospitals and providers of tertiary services will be free of this requirement beginning in July 2019, while specialty hospitals will no longer be subject to the CON law starting in 2021.²  As of now, hospices, nursing homes, and intermediate care facilities for persons with developmental disabilities (ICF/DD) would still be subject to the CON regulations.³  While Governor Ron DeSantis has not yet signed the bill, he is expected to do so, and the law would subsequently become effective July 1, 2019.⁴

State CON laws generally require healthcare providers to obtain authorization from a state to construct new healthcare facilities, expand/renovate existing ones, or offer certain healthcare services.⁵ Most states adopted CON programs in response to the National Health Planning and Resources Development Act of 1974, which offered states financial incentives to adopt CON programs;⁶ this law was repealed in 1986.⁷ These programs were supposed to “control...costs by restricting provider capital expenditures,” but these outcomes never ensued, leading to the Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice (DOJ) suggesting, approximately 15 years ago, that states repeal or retrench their CON laws.⁸ To date, 15 states have eliminated their CON programs, although three of them still have some variation of a CON program.⁹ As of July 2019, it appears that Florida will join that group.

Notably, the passage of this Florida legislation comes after the publication of a federal government report that aggressively pushed states to repeal their CON laws. In December 2018, the Department of Health & Human Services (HHS), the Department of Labor (DOL), and the Department of the Treasury, issued a report entitled “Reforming America’s Healthcare System through Choice and Competition,” which argued in part that the existence of CON laws has been a significant cause of escalating healthcare costs.¹⁰

Florida’s CON deregulation may spur other states that have also been considering CON repeals (or some variation thereof), including Georgia, Alaska, South Carolina, and North Carolina. In April 2019, the Georgia House passed a bill that (among other provisions), effective July 1, 2019, limits the healthcare providers that could object to a CON application from any hospital, to only those within a 35-mile radius of the proposed project; allows for the establishment of freestanding emergency departments (FSEDs); and, increases the capital expenditure thresholds for new healthcare services from $2.5 million to $10 million.¹¹ This bill was the culmination of a number of influencing events, including the failure of a previous (more restrictive) bill, strong lobbying efforts against the measure by Georgia hospitals, and public support for the measure from Governor Brian Kemp.¹²

On the other side of the country, Alaska legislators are seeking to repeal the state’s CON law for the third straight year. Identical bills in the state house and senate (House Bill 17 and Senate Bill 1, respectively), seek a wholesale repeal of the law, and are currently in their respective committees for consideration.¹³ Similarly, South Carolina legislators introduced a bill to wholesale repeal its CON laws in January 2019. House Bill 3823 has since been referred to committee for consideration.¹⁴ In April 2019, North Carolina legislators introduced multiple bills to: (1) repeal the entirety of the CON law (Senate Bill 539); and, (2) absolve ASCs from CON requirements (Senate Bill 646 and House Bill 857).¹⁵ All three bills have passed their first reading and have also been referred to the respective committees.¹⁶

In addition, a number of states (including Missouri, Montana, Oregon, and West Virginia) have recently repealed CON requirements related to transportation, and Kansas is currently considering such a repeal.¹⁷ Of note, most of these states are considered to be conservatively leaning, from a political standpoint, which may indicate that the Trump Administration report advocating for the repeal of these laws has resonated with states, and motivated this newest wave of CON law repeals.