A new law takes effect immediately that will make it easier for health facilities to make costly improvements and limit where the University of Mississippi Medical Center can open new locations without state approval after Gov. Tate Reeves signed the legislation into law Wednesday. 

Lawmakers passed nearly identical changes to the state’s certificate of need law last session, but this year, they removed a provision that led Republican Gov. Tate Reeves to veto the legislation in April. 

Certificate of need law requires providers to receive state approval before opening new services or paying for expensive upgrades by proving that people need the services in their area. The regulations are meant to lower costs and enhance the quality and accessibility of health care by preventing duplication of services, but stakeholders are divided on whether the law accomplishes its goals. 

Reeves signed the bill Wednesday, doubling the cost thresholds that triggers the requirement. For clinical improvements other than major medical equipment, hospitals will now require approval for changes over $10 million, up from $5 million. It also seeks to level the playing field between the University of Mississippi Medical Center and other health care providers by limiting UMMC’s certificate of need exemption to the area around UMMC’s main campus and the Jackson Medical Mall. For years, UMMC has been exempt from certificate of need requirements for facilities or equipment that is used for education. 

Critics argue that certificate of need stifles competition and fails to decrease costs. Advocates say it ensures that communities have access to a range of health services, not only those that are profitable. In Mississippi, where over half of rural hospitals are at risk of closing, some argue that the laws prevent struggling hospitals from opening profitable service lines that could shore up their bottom lines. 

Both chambers of the Legislature have made efforts to loosen certificate of need laws to help rural areas. 

The House passed a bill with a vote of 121-1 Wednesday to exempt existing rural hospitals from certificate of need regulations. The change would allow 55 hospitals in Mississippi to open new health services or make improvements within a 5-mile radius of the hospital’s main building without state approval. 

The bill also exempts Humphreys and Issaquena counties entirely from certificate of need law, and directs the Mississippi State Department of Health to study requiring hospitals to treat a certain percentage of uninsured patients.

“House Bill 1622 is about giving our rural hospitals a fighting chance while still protecting the stability of the rest of our hospitals,” House Public Health and Human Services Chairman Sam Creekmore, a Republican from New Albany, said Wednesday. 

House Medicaid Chairwoman Rep. Missy McGee, a Republican from Hattiesburg, cast the only dissenting vote on the bill, arguing that allowing hospitals to open new facilities, like outpatient dialysis centers, could harm existing health care services and spread resources too thin. She said there are already outpatient dialysis centers close to several rural hospitals in the state. 

“It seems like it’s a really broad bill, and … I’m concerned that it’s blowing the whole (certificate of need) open in our state,” McGee said. 

The Senate Public Health and Welfare Committee passed two bills Feb. 3 that would loosen certificate of need provisions. One would create a pilot program that tasks the state health officer to issue licenses for three outpatient dialysis units, three ambulatory surgery centers and one geriatric psychiatric facility connected to rural hospitals. The facilities would be required to be within five miles of the rural hospital’s main location. 

Certificate of need law has long been criticized as cumbersome and time-consuming, frequently delaying the opening of new health care services when competing health providers appeal the state’s issuance of a certificate. 

Another bill passed by the Senate committee would require any party requesting a hearing on the state’s decision and losing, pay the fees associated with the hearing. Senate Public Health and Welfare Chair Hob Bryan, a Democrat from Amory, said there has only been one instance in which a party has won an appeal on certificate of need, but that numerous appeals have held up the process without prevailing. 

“There’s no good that’s coming from the endless litigation,” Bryan said. 

Sen. Angela Hill, a Republican from Picayune, said the process resembled a “kingdom,” making it harder to challenge the health department’s decisions. The system would be better without certificate of needs altogether, she said. 

“We gotta quit picking and choosing and let the market work,” Hill said. “And let people bring in health care and deliver health care where it’s needed. And God knows, it’s needed all over Mississippi.” 

The state’s certificate of need law is a familiar target for legislative reform in Mississippi, but few substantial changes have been made to the law in a decade. 

The legislation approved by the governor Wednesday also directs the health department to study easing some approval requirements for small hospitals for dialysis and geriatric psychiatry services, a move that could lead to future reforms. The bill also requires the agency to study requiring psychiatric facilities to treat a certain percentage of uninsured patients, and approves or revises certificates of need for specific facilities in Madison, DeSoto and Harrison counties.