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What will happen with the Certificate of Need law? Ask 10 people, get 8 different answers
Fairview Park Hospital in Dublin, Georgia. (Credit: Fairview Park Hospital)
Editor’s note: This is the third in a series of stories looking at the lack of health care in areas of rural Georgia and how providers and lawmakers are dealing with the issue.
The question at the heart of one of Georgia’s most contentious public policy debates is this: Overhaul or ditch Georgia’s regulatory system that determines if new hospitals or other medical facilities are needed?
The state’s Certificate of Need law (CON) was created 44 years ago as a way to control health care costs and cut down on duplication of services and unnecessary expansions. It determines when, where and if hospitals need to be built.
In recent years, however, the regulatory law has proved controversial. Georgia lawmakers are now trying to decide whether to keep it, tweak it or do away with it entirely.
What’s Happening
Georgia’s CON law requires anyone wanting to build a new hospital or provide new medical services to prove to the state Department of Community Health that the facility or services are needed in that community.
CON has been particularly tough for those living in rural Georgia where millions of people live in medical deserts. A sudden, severe illness or even routine checkups can mean traveling hours and miles to a hospital, depending on where you live.
“Certificate of Need has been harmful for Georgia. There are fewer medical services than there would be otherwise,” Thomas Stratmann, an economics professor at George Mason University, told State Affairs. “In particular, there are fewer hospital beds, both in rural areas and urban areas, and also few ambulatory surgery centers in rural and urban areas.”
Stratmann has studied for over a decade the impact of CON on numerous states, including Georgia. He was one of several public policy and health care experts who spoke earlier this month at the Capitol for the first hearing of the Georgia Senate Study Committee on Certificate of Need Reform. Other hearings will be held throughout the summer throughout the state.
While experts spoke overwhelmingly at the hearing for ending CON laws in Georgia, there are those who say it works.
“It has quality control rules and regulations,” Monty Veazey, president and CEO of the Georgia Alliance of Community Hospitals, told State Affairs. “It protects a rural hospital from an ambulatory surgery center coming in and building next to it and drawing the paying patient out of the hospital into that ambulatory environment. That just kills a rural hospital.”
Jaimie Cavanaugh of the Institute for Justice disagrees.
She cited studies that show states with CON laws have 30% fewer rural hospitals per capita and 14% fewer rural ambulatory surgical centers per capita.
“Residents in CON states have to drive longer distances to access health care and face longer wait times in emergency departments,” Cavanaugh told the Senate study committee. “CON laws reduce access to care and suppressing the supply of healthcare harms patients and is bad for the economy.”
A complex history
CON has had a contentious existence almost from the time the Georgia General Assembly passed the law in 1979. Congress repealed the federal CON law in 1984, realizing it wasn’t working in the ever-changing health care landscape where new types of medical advances and facilities were continuously emerging.
In 1988, then-U.S. Rep Roy Rowland, a Democrat and family practice doctor in Dublin, Georgia, told his congressional colleagues of the “harmful impact” of CON on a rural hospital in his east Georgia district. While the federal version had ended, Rowland was determined to end the state-level CON laws.
The Georgia Public Policy Foundation recounted Rowland’s story in its "Economic Report on Georgia’s Certificate of Need Program."
At that time, Putnam General Hospital in Eatonton wanted to renovate its 20-year-old building. It would be financed by a 1-cent sales tax approved by the community. Under Georgia’s CON law, the proposed renovation needed approval from the state’s health planning agency. The state said it would deny it — unless the hospital eliminated 10 beds. The agency felt the hospital had too many beds for the area, even though the hospital wasn’t planning to add beds.
Eliminating the beds wouldn’t save money, Rowland said, but it would cut the number of licensed practical nurses being trained at the hospital. It would also cost the hospital money if it sought to regain those beds back through the CON program in the future.
“At first glance [CON] may have looked pretty good; however, the effect of [CON] on health care costs has been dubious, at best. And the program has certainly been insensitive in many instances to the true needs of our communities,” Rowland said.
By 1990, 11 states no longer had CON laws. South Carolina lawmakers overhauled their CON law this year (it sunsets in 2025), except for long-term care facilities.
As of January of this year, 35 states and Washington, D.C., have CON programs that vary by state, according to the National Conference of State Legislatures.
Efforts to tweak or abolish the CON law in Georgia failed during the recent legislative session. Senate Republicans introduced two bills.
Senate Bill 99 would have exempted most rural hospitals from the CON law. It passed in the Senate but died in the House. Senate Bill 162 called for eliminating the law except for long-term care facilities. It never reached the Senate floor for a vote.
Now, the job of deciding CON’s fate lies with the Senate Study Committee on CON Reform and the House Study Committee on Certificate of Need Modernization. The House committee is set to meet July 13 at the Capitol. Both committees include a mix of lawmakers, physicians, insurance industry executives, medical school officials and top executives at the state’s top hospital chains.
Why It Matters
It may help to understand what’s going on in other parts of the country, especially when it comes to rural healthcare.
Eight rural hospitals have closed in Georgia over the last decade. Another 19, or 28%, are at risk of closing, according to the Center for Healthcare Quality and Payment Reform.
There are more rural hospitals in states without CON, Jaimie Cavanaugh of the Institute for Justice told Senate study committee members. Five states — Colorado, Montana, Oregon, Utah and Wyoming — without CON have had no rural hospital closings, Cavanaugh said. CON also keeps hospitals from growing. If you want to add services to a hospital, or bring other new medical innovations to an area, you have to get a Certificate of Need first, she said.
Atlanta health care attorney Barry Herrin has dealt with CON law for over 30 years. He has worked with doctors, hospitals, and other health care providers looking to build new facilities in Georgia, North Carolina, Florida, Mississippi, Louisiana, Alabama and Texas. Georgia has one of the most restrictive CON laws in the south, Herrin said.
Over the last decade, Herrin said he’s had “ three or four clients” who couldn’t build or expand in Georgia due to CON hurdles. They had projects ranging from ambulatory surgery centers, radiation therapy, facility expansions, a new specialized service or ownership change, which also requires getting a CON.
Georgia has 13 health care service delivery regions.
“The state decides what service delivery region you're in,” Herrin explained. “If you're in a region, and somebody in that region doesn't like what you’re doing. They can object.”
Existing hospitals have been known to oppose proposals in their areas. The case may end up in litigation or the project is withdrawn or denied.
Georgia’s CON law has kept birthing centers, free-standing emergency departments, radiation therapy treatment centers and new hospitals from opening, experts said.
Florida, for instance, has gained 64 ambulatory surgery centers since it repealed its CON laws in 2019, Chris Denson of Georgia Public Policy Foundation noted. Ambulatory surgery centers are more economical in Georgia, Dr. John Gleason of Resurgence Orthopedics told the Senate committee.
“Certificate of Need has a negative effect on the quality of services simply because [CON] reduces competition between hospitals,” Stratmann said. “And less competition is often associated with lower quality of service and higher costs.”
Having access to a variety of health care options isn’t the only issue.
The Kaiser Family Foundation found states with CON laws had 11% higher health care costs than those without.
It stymies competition, says one rural politician who has tried to get a hospital in his community.
“We just don't have any choice here and we have some of the highest health care costs in the nation,” Lee County Commission Chair Billy Mathis told State Affairs.
Lee County is among Georgia’s wealthiest counties, yet residents in this rural southwestern enclave have to travel to nearby Dougherty County to visit a hospital when they get sick or are in labor.
That trek is likely to continue for the foreseeable future for the county’s 33,000 residents. State regulators recently revoked Lee’s Certificate of Need after giving the county numerous extensions. The revocation essentially kills the county’s plans to build a 60-bed hospital, ending a five-year effort and $8 million court fight to make the proposed Lee County Medical Center a reality.
The ongoing legal feud over the proposed hospital delayed the ground-breaking and ultimately led to the project’s demise, Mathis said, adding, “Monopolies breed inefficiencies when you only have one hospital in the area,” Mathis said.
“We're not going to give up. I'm always hopeful that the Georgia Legislature will come to their senses and either do away with the Certificate of Need laws or amend them so you don't have to spend the first two or three or four years tied up in litigation,” said Mathis.
Some health care experts say expanding Medicaid would help alleviate the problems around CON and provide payment to rural hospitals that provide care to large numbers of uninsured and underinsured patients.
Georgia is among 10 states that have not expanded Medicaid, a possible solution to CON, some experts say.
More than 1 in 8 Georgians do not have health care coverage, according to Leah Chan, director of health justice at Georgia Budget and Policy Institute.
An estimated 1.3 million Georgians are uninsured, and Georgia’s uninsured rate of 13.7% is the third-highest in the nation. That rate is expected to climb to 1 in 4 uninsured Georgians in rural Georgia by 2026, GBPI said.
“The geographic burden is heaviest on Georgians living in rural communities,” Chan said. “As a state, we cannot have honest conversations about ensuring Georgians have access to affordable, high-quality health care without talking about full Medicaid expansion.”
Data from states that expanded Medicaid showed the expansion helped stabilize finances for hospitals and providers, particularly in rural areas.
“Some of these rural hospitals that may be suffering would all of a sudden have access to a large influx of cash and [would] not have to be covering poor folks by eating the bills,” Charles Bullock, University of Georgia political science professor, told State Affairs. “The amount of money, which would be available immediately, is in the billions of dollars.”
Any further talks regarding CON must include Medicaid expansion, Chan said. “Wherever we land with CON, it is clear that keeping our rural communities healthy means fully expanding Medicaid," she said.
Georgia has spent over $15.3 billion on Medicaid since 2018, Gov. Brian Kemp said in February.
“While the state spends more and more, Georgians aren’t seeing an improvement in care they receive,” the governor said. Instead of expanding the federal Medicaid program, Georgia has instituted a work-for-Medicaid program, which starts this month, for Georgians currently not in the program to qualify for health care.
In April, the Georgia Department of Community Health (DCH) announced final approval by the Centers for Medicare & Medicaid Services (CMS) of its revised Disproportionate Share Hospital (DSH) allocation methodology.
It’s part of a little-known federal Medicaid program, known as the “directed payment plan,” which will reallocate more than $100 million in Medicaid money from more prominent hospitals like Grady Memorial Hospital to the state’s 60 rural hospitals and 21 teaching hospitals.
“It has been the best-kept secret that is not a secret,” state Sen. Ben Watson, a Savannah-area physician who is a member of the Senate study committee, told State Affairs. “It is so beneficial to all the rural hospitals and all the teaching hospitals. So, instead of closing hospitals, this will keep hospitals open. This will make them profitable. The hospitals should do well, from that perspective; they won't be struggling.”
What’s Next?
For now, the CON debate continues as the Legislature’s two study committees work to figure out a solution.
The Senate study committee will host hearings in Columbus on Aug. 15 and Savannah in October. The committee returns to Atlanta for the final report in November. The House study committee will meet July 13 in Atlanta.
“Everybody’s in agreement (CON) needs to be tweaked,” Watson said. “The question is, do we still need it or not?”
Certificate of Need: By the Numbers
States with CON laws: 35 plus Washington, D.C.
States that have repealed CON laws*: 12
States with CON laws that exclude rural facilities or don't apply to hospitals: 9
States with vast rural areas that have ended CON programs entirely: 5
States that have had no rural hospital closures since 2005: 5
Rural hospitals that have closed in Georgia since 2005: 10
* 2022 data.
Source: National Conference of State Legislatures; Institute for Justice; Sheps Center at the University of North Carolina.
Have questions or comments about the Certificate of Need? Contact Tammy Joyner on Twitter @lvjoyner.
Twitter @StateAffairsGA
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LinkedIn @stateaffairs
Header image: Fairview Park Hospital in Dublin, GA (Credit: Fairview Park Hospital)
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House speaker Jon Burns hires new communications director
House speaker Jon Burns, R-Newington, announced today that he has hired a new communications director. Kayla Roberson, who has served as press secretary at the Georgia Chamber for the past year or so, will now oversee all external communications, media relations and strategic messaging for Burns.
“I’m excited to welcome Kayla to our team,” Burns said in a statement. “Kayla has an excellent background, deep skill set and strong work ethic, and we’re excited to have her on board to continue getting our message out and sharing the House’s priorities ahead of and into the next session.”
A double major in political science and journalism at the University of Georgia, where she graduated in 2022, Roberson interned for U.S. Rep. Andrew Clyde, a Republican in north Georgia’s 9th Congressional District, and worked as a consultant for GOP political candidates before joining the Georgia Chamber.
“I’m beyond grateful for the opportunity to work under the leadership of speaker Burns,” Roberson told State Affairs. “Whether it’s improving education opportunities, putting money back in the pockets of hardworking Georgians, creating jobs or supporting our rural communities, speaker Burns always prioritizes doing what is best, and what is right, for Georgia.”
Political strategist Stephen Lawson, who has held the top communications role for the speaker since last December, announced he’s joining Dentons, where starting today he’ll lead the global law firm’s public affairs efforts.
Have questions or comments? Contact Jill Jordan Sieder on X @journalistajill or at [email protected].
Global bird flu disrupts Georgia exports, costing chicken producers millions
ATLANTA — A global bird flu that has rapidly spread from birds to dairy cows, milk supplies and humans has cost untold millions of dollars in lost export business in Georgia, the nation’s leading poultry producer, officials with the state Department of Agriculture and poultry industry said.
Georgia has had only three reported cases of H5N1 avian influenza since it reemerged in 2022. The last of those cases was resolved in November 2023 but ramifications of those outbreaks continue to have a big effect on the state’s ability to export chicken and chicken parts, such as chicken feet, to different countries, including China, one of Georgia’s biggest export markets for chicken feet.
In 2022, frozen chicken feet, for example, accounted for more than 85% of all U.S. poultry exported to China, according to Farm Progress, publisher of 22 farming and ranching magazines.
The $30 billion poultry industry is Georgia’s largest segment in its No. 1 industry — agriculture.
China has also placed a ban on the import of chicken products from 41 other American states. The ban on Georgia products went into effect Nov. 21, 2023. Efforts to reach the Chinese Embassy in Washington, D.C. were unsuccessful.
Georgia Poultry Federation President Mike Giles estimates the state’s loss at “well into the millions of dollars.”
“It’s a significant amount in a significant export market for us,” he said. “Poultry paws [feet] immediately lose value because of the loss of demand.”
The ban has forced Georgia poultry producers to find alternative markets for their products that would normally be headed to China.
“Some are sold domestically, some are frozen and stored, hopefully to find markets later on, and some go to other countries,” Giles said.
This isn’t the first time China has banned U.S.-produced poultry products due to a bird flu outbreak. The country instituted a ban in January 2015 which lasted until November 2019 — even though U.S. poultry products were deemed free of the disease by August 2017.
After that ban was lifted, China’s appetite for American-produced chicken products became voracious.
In 2022, U.S. producers shipped nearly $6 billion in poultry meat and related products (excluding eggs) to over 130 countries. China has emerged as the second largest destination for U.S. poultry exports, increasing from $10 million in 2019 to a record $1.1 billion in 2022, according to Southern Ag Today.
Chicken paws, for instance, are eaten in many Asian countries, including the Philippines, Thailand, Indonesia and Korea.They can also be found on Chinese dim sum menus throughout the U.S. and are also popular in Jamaica, Trinidad, Russia and Ukraine in everything from soups and curries to fried snacks.
Three Georgia counties have reported H5N1 outbreaks since 2022. The most recent case was late last year. Henry, Sumter and Toombs counties each reported one case of H5N1 bird flu. Those outbreaks are resolved, poultry and state agriculture officials say.
“When HPAI cases are found in any state, that state is given a designation that could lead to foreign countries halting trade on poultry products from that state,” Georgia Department of Agriculture spokesman Matthew Agvent told State Affairs.
Not since 2016 has the United States experienced such a fast-moving case of the H5N1 avian influenza. In the last two months, the virus has spread in parts of the United States from birds to dairy cows, some milk supplies and humans. Two people — a Texas dairy worker and a prison inmate in Colorado who was killing infected birds at a poultry farm — are reported to have caught the virus, according to news reports. The outbreak is the largest in recent history, impacting both domestic poultry and livestock as well as wild birds and some mammal species.
State officials are continuing to monitor the national outbreak and its impact on Georgia.
Georgia’s poultry & egg industry: At A Glance
Annual economic impact: $30.2 billion
Percentage of the Agriculture industry: 58% *
Jobs: 87,900
Counties involved in poultry & egg production: 3 out of 4
National ranking in chicken broiler production: No. 1
Daily production of table eggs: 7.8 million
Daily production of hatching eggs: 6.5 million
Pounds of chicken produced daily: 30.2 million
Pounds of chicken produced annually: 8 billion
Number of chicken broilers processed each day: 5 million
Counties involved in poultry & egg production: 3 out of 4
Source: Georgia Poultry Federation; The Center for Agribusiness & Economic Development, University of Georgia, Ag Snapshots 2024; Georgia Poultry Federation.
Have questions? Contact Tammy Joyner on X @lvjoyner or at [email protected].
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Kemp signs bills on education, health care, taxes
Gov. Brian Kemp signed a slew of bills over the past week or so, including the private school voucher bill long sought by Republicans and a bill that will ease regulations over the construction and expansion of medical facilities in rural areas.
His bill-signing events were clustered into themes: education, health care, military members, human trafficking and Georgia’s coastal communities.
Education
Among the education-related bills Kemp signed was Senate Bill 233, also known as the Georgia Promise Scholarship Act, which provides the families of Georgia students enrolled in underperforming school districts with $6,500 scholarships that can be used toward private school or homeschooling expenses, including tuition, fees, textbooks and tutoring.
“Georgia is affording greater choice to families as to how and where they receive their education, while also continuing our efforts to strengthen public schools, support teachers, and secure our classrooms,” Kemp said, and thanked leadership in the House and Senate for prioritizing passage of the bill, which had failed in a close vote in 2023.
Democrats and many public education advocates who opposed the bill argued it will drain resources from public schools and primarily benefit students from wealthy families.
Kemp also signed Senate Bill 351, sponsored by nine Republican senators, which will require social media companies, as of July 1, 2025, to verify their users are at least 16 years old unless they receive approval from a parent.
House Bill 409, sponsored by Rep. Lauren Daniel, R-Locust Grove, directs school systems to consider not having bus stops where a student would have to cross a roadway with a speed limit of 40 mph or greater. The bill also increases the penalty for passing a stopped school bus to $1,000 from $250.
Kemp noted that Ashley Pierce, the mother of Addy Pierce, an 8-year-old who was fatally struck by a motorist as she boarded her school bus, “passionately advocated for and was instrumental in the passage of this legislation.”
Senate Bill 395, sponsored by Sen. Clint Dixon, R-Gwinnett, states that no school visitor or personnel can be prohibited from possessing an opioid reversal drug such as Narcan and directs schools to maintain a supply. It also allows opioid antagonists to be sold in vending machines and directs certain government buildings to maintain a supply of at least three doses.
Senate Bill 464, also sponsored by Dixon, creates the School Supplies for Teachers Program to financially and technically support teachers purchasing school supplies online. It also creates an executive committee of five voting members within the Georgia Council on Literacy and limits the number of approved literacy screeners to five, one of whom must be available to schools for free.
Health care
The governor chose his hometown of Athens as the venue to sign several bills aimed at improving health care in rural and underserved communities.
Among them was House Bill 1339, sponsored by Rep. Butch Parrish, R-Swainsboro, which revises the Certificate of Need process by which the state determines if and how new medical facilities can be built or expanded. The bill provides for several new exemptions, including psychiatric or substance abuse inpatient programs, basic perinatal services in rural counties, birthing centers and new general acute hospitals in rural counties. It also raises the total limit on tax credits for donations to rural hospital organizations to $100 million from $75 million.
Senate Bill 480, sponsored by Sen. Mike Hodges, R-Brunswick, establishes student loan repayments for mental health and substance use professionals serving underserved youth in the state or in unserved geographic areas disproportionately impacted by social determinants of health.
House Bill 872, sponsored by Rep. Lee Hawkins, R-Gainesville, chair of the House Health and Human Services Committee, expands cancelable loans for certain health care professionals to dental students who agree to practice in rural areas.
Senate Bill 293, sponsored by Sen. Ben Watson, R-Savannah, chair of the Senate Health and Human Services Committee, reorganizes county boards of public health and opens the qualifications for the CEO of each county board of health to include either licensed physicians or people with a master’s degree in public health or a related field.
Military members and veterans
Kemp on Wednesday focused on bills to improve military recruitment and provide more work opportunities for veterans and military family members.
House Bill 880, sponsored by Rep. Bethany Ballard, R-Warner Robins, allows spouses of military service members to work under a license they hold in good standing in another state while under the supervision of an existing Georgia medical facility or provider.
Senate Bill 449, sponsored by Sen. Larry Walker, allows military medical personnel to practice for 12 months while a license application is pending, including working as a certified nursing aide, certified emergency medical technician, paramedic or licensed practical nurse. The bill also creates a new advanced practice registered nurse license and makes it a misdemeanor to practice advanced nursing without a license.
Human trafficking
The governor on Wednesday was accompanied by first lady Marty Kemp and other members of the GRACE Commission for the signing of an anti-human trafficking package. It includes Senate Bill 370, which adds certain businesses to the list of organizations that must post human trafficking notices, including convenience stores, body art studios, businesses that employ licensed massage therapists and manufacturing facilities.
Sponsored by Sen. Mike Hodges, R-Brunswick, the bill also allows the Georgia Board of Massage Therapy to initiate inspections of massage therapy businesses and educational programs without notice and requires massage therapy board members to complete yearly human trafficking awareness training.
House Bill 993, sponsored by Rep. Alan Powell, R-Hartwell, creates the felony offense of grooming of a minor and creates new penalties for offenses relating to visual mediums depicting minors engaged in sexually explicit conduct.
House Bill 1201, sponsored by Rep. Houston Gaines, R-Athens, allows human trafficking survivors who received first offender or conditional discharge status to vacate that status for certain crimes, as long as the crime was a direct result of being a victim of human trafficking.
Coastal communities
Earlier today in Brunswick, Kemp signed legislation impacting Georgia coastal communities, including House Bill 244, which amends the laws around how wild game can be hunted and how seafood dealers operate, and House Bill 1341, which designates white shrimp as the state’s official crustacean.
Taxes
Earlier this month Kemp signed several bills related to taxation, including House Bill 1015, sponsored by Rep. Lauren McDonald, R-Cumming, which lowers the state income tax for tax year 2024 to 5.39%, accelerating a multiyear drop in state income taxes that started at 5.75% in 2023 and will continue through 2029.
The Governor’s Office of Planning and Budget estimates the tax cut acceleration will save Georgia taxpayers approximately $1.1 billion in calendar year 2024 and about $3 billion over the next 10 years.
Kemp also signed House Bill 1021, sponsored by Rep. Lauren Daniel, R-Locust Grove, which increases the state’s income tax dependent exemption to $4,000 from $3,000.
House Bill 581, sponsored by Reps. Shaw Blackmon, R-Bonaire, and Clint Crowe, R-Jackson, enables a constitutional amendment (House Resolution 1022) to let voters decide whether counties can provide a statewide homestead valuation freeze, which limits the increase in property values to the inflation rate.
The governor has until May 7 to sign or veto bills passed during the legislative session that ended on March 28. Those he takes no action on will automatically become law.
Legislation signed by Kemp is posted on the governor’s website.
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Have questions, comments or tips on education in Georgia? Contact Jill Jordan Sieder on X @journalistajill or at [email protected].
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