A bill cleared the Legislature on Wednesday that would temporarily ease state approval requirements for rural hospitals, allowing them to add new services or make costly upgrades as lawmakers aim to help struggling facilities provide needed care and boost revenue.
The bill establishes a pilot program that will benefit about 55 rural hospitals across the state until June 2027. The legislation would loosen the state’s certificate of need laws, which require providers who want to open new services or make costly expansions to first prove they are needed in their area to curb potentially wasteful spending. Hospitals require approval for changes over $20 million for nonclinical improvements, $10 million for clinical improvements and $3 million for major medical equipment.
Hospitals in small communities will be granted approval to open one new facility within five miles of their main campuses or make an improvement above the threshold, and those located in the Mississippi Delta will be allowed two exemptions. The facilities will also be allowed to open geriatric psychiatric units without seeking approval first.
The House and Senate traded bills altering certificate of need requirements for rural hospitals this session, nearing consensus as the session went on. House Bill 1622 will go to Republican Gov. Tate Reeves’ desk in the coming days. If the governor signs the bill or allows it to become law without his signature, it will go into effect immediately.
Senate Public Health and Welfare Chairman Hob Bryan, a Democrat from Amory, said March 5 that, while he has been slow to support changes to the state’s certificate of need law, he believes there is merit in implementing a pilot program to see if loosening restrictions could help rural hospitals.
“I know for sure there are going to be unintended consequences,” Bryan said. “I don’t know what they are … but I think the time has come, as I phrased it from time to time, to do something in this general area.”
The author of the legislation, House Public Health and Human Services Chairman Sam Creekmore, a Republican from New Albany, previously told Mississippi Today he drafted the legislation to allow rural hospitals more flexibility to open services without going through the certificate of need process, “hopefully making them more profitable, and providing better health care services at the same time.”
Certificate of need laws aim to lower costs and improve the quality and accessibility of health care by reducing duplication of services, but stakeholders are divided on whether or not it accomplishes its goals.
Critics argue the law 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 more than half of rural hospitals are at risk of closure, some people argue the law harms rural hospitals by restricting the services they are allowed to offer.
The bill also aims to speed up the certificate of need process by implementing a ‘loser pay’ provision. This language would require any party appealing the state’s approval for a new facility or improvement to pay the applicant’s legal fees if the ruling is not overturned.
Certificate of need law has long been criticized as cumbersome and time-consuming, often slowing the opening of new health care services when competing health providers appeal the state’s issuance of a certificate.
The legislation passed Wednesday also removes Humphreys and Issaquena counties from certificate of need requirements entirely and grants the state health officer the authority to issue licenses to eight dialysis facilities across the state.
The legislation is the second change lawmakers have proposed to the state’s certificate of need law this session. Reeves signed a bill Feb. 4 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.
Another similar measure that makes it easier for rural hospitals to open facilities was passed by the House March 10 and has been returned to the Senate for consideration.
