TALLAHASSEE, Fla. – It’s been less than two weeks since Florida jettisoned some long-standing regulations for hospitals, but several facilities across the state are already gearing up to expand medically complex services, such as transplants.
For the last two years, five hospitals have shown an interest in offering new high-end services, but they were unable to do so because of the state’s “certificate-of-need” requirements.
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Some hospitals went through the lengthy and expensive CON application process and ultimately were turned down by the Agency for Health Care Administration, which decided there was no additional need for the proposed services.
Other hospitals notified the state of their intent to submit a certificate of need for a new service but never formally submitted an application.
But now that the law has been eliminated, three of the five hospitals told The News Service of Florida that they would be working with the state to move ahead on offering the programs. Two other hospitals said they are continuing to examine their options.
The repeal of the CON program was one of House Speaker Jose Oliva’s top priorities for the legislative session that ended in May.
Largo Medical Center in Pinellas County notified the state in April of its desire to obtain a certificate of need to open an adult heart transplantation program. But the facility later decided to not submit an application, due to the legislative effort to eliminate the CON program.
Largo Medical Center “provides world class cardiovascular and transplant services on a daily basis to our community,” the center’s spokeswoman Tammy Robiconti said in a prepared statement.
Baptist Health in Duval County followed a similar path. The hospital notified the state of its intent to establish an adult bone marrow transplantation program in April, shortly before the Legislature agreed to eliminate the CON program.
“We continue to move forward with our plans based on Florida’s revised licensure requirements,” Cindy Hamilton, executive director of corporate communications for Baptist Health, told the News Service in an email.
The desire to launch new programs may be even stronger in Orange County, where two children’s hospitals have shown an interest in expanding services.
Orlando Health Arnold Palmer Hospital for Children moved to open a new pediatric heart transplant program in October 2017, but AHCA rejected the plan.
Alayna Curry, a spokeswoman for the children’s hospital, said in a statement the hospital remains “committed to starting a pediatric heart transplant program in the future, as we believe this will address a need in our community and make it unnecessary for patients and families to leave our area for care.”
Nemours Children’s Hospital in Orlando also has submitted CON applications over the years that have been denied by health-care regulators.
The hospital submitted three CON applications in 2016 -- one for a heart transplant program, one for a lung transplant program, and another for a joint heart/lung transplant program. The state approved only a pediatric lung transplant program.
In 2017, Nemours notified state health-care regulators that it was going to submit a CON application for a pediatric liver transplant program. But the hospital dropped the effort.
While the hospital has long shown an interest in expanding its services, Yusila Ramirez said “there are many questions” about the new law, and “it is not clear yet how it will impact our strategies in the future.”
Nemours isn’t the only hospital waiting to see what the new regulatory environment looks like before publicly committing to moving forward.
Cleveland Clinic in Weston sought a CON for a bone marrow transplant program in April 2016 but AHCA turned down the proposal. The hospital tried again in October 2018 and was rebuffed once more.
In an interview with the trade publication HealthLeaders, Cleveland Clinic CEO Wael Barsoum said its efforts to open adult bone marrow transplant program had been “thwarted” by a competing hospital.
Clevland Clinic spokeswoman Arlene Allen Mitchell, though, was reserved when asked about the hospital’s future plans. The facility is “evaluating our options regarding future services,” she said in an email.
Florida has had a certificate-of-need program in place since the 1970s. Proponents of the regulatory requirement argue that, because health care is not a typical commodity that is sold, free-market economic principles don’t apply. They also say the CON requirements keep health-care costs in check because services won’t be overbuilt in some areas and ignored in others.
Opponents, meanwhile, argue that CON places artificial barriers on the health-care delivery system and protects existing providers from competition.
The Florida Legislature has tried to eliminate the CON program for decades, but to no avail. And while there have been some changes to the program, the wholesale elimination of CON for new hospitals and “tertiary services” didn’t pass until Oliva made it his top issue this year.
The legislation, signed into law by Gov. Ron DeSantis last month, eliminated the certificate-of-need requirement for new general hospitals and “tertiary services” on July 1. It will repeal a certificate-of-need requirement in 2021 for specialty hospitals, such as children’s hospitals.
Tertiary services include such things as organ transplants and pediatric open-heart surgery and neonatal intensive-care units.
The CON program, though, remains intact for nursing homes, hospices and intermediate care facilities for individuals with developmental disabilities.
In lieu of requiring hospitals to show there is a need for a program like bone marrow transplants, the new law will allow hospitals to open the program as long as they meet certain licensure requirements.
The new licensure requirements will have to be adopted through rules, a process that could take months. AHCA last week released what agency spokesman Patrick Manderfield called “supplemental information” that the state will ask for until the rules are adopted.
Florida’s chief economist, Amy Baker, said it’s too early to know how the sweeping regulatory change will affect state revenues.
“If industry cost structure changed globally, there is a spill-over effect that would come back on state employee health insurance and Medicaid,” Baker said. “It won’t be something where you see an immediate impact. Changing the cost structure of the health industry is going to evolve over time, whether it’s up or down.”