Cutting through the CONfusion: Movement to relax the limits

Certificate-of-need laws still apply in the majority of states, and some have extended their reach beyond typical hospital services. With the AMA and the FTC questioning the effectiveness of CON laws, some states are taking another look at their programs.

By Mike Norbut, AMNews staff. Feb. 7, 2005.

In Alabama, you have to prove that a need exists before you can purchase an ultrasound machine for your office.

In 13 states, including Maine, if you want to offer renal dialysis services, you must get state approval. Connecticut regulates some business computer purchases, and Washington, D.C., needs to approve the construction of your medical office building.

These requirements all come courtesy of certificate-of-need laws, commonly called CON laws. They were created to regulate health care spending, particularly for hospitals.

But in some states, the net has been cast more widely. Thirty-six states plus Washington, D.C., have CON laws, and each state varies according to what's regulated and the economic thresholds that, if surpassed, would require state review of projects.

The AMA long has opposed CON laws on grounds that there is little evidence to suggest that regulations effectively rein in health care costs. But at the Interim Meeting in December 2004, AMA delegates took a more aggressive stance. They voted to oppose federal CON legislation, oppose the expansion of CON laws in some states and support state medical groups that are working to get some laws repealed.

Critics of CON laws have noted that hospitals are among those who have lobbied in some states to extend laws to physician-owned facilities, such as specialty hospitals, ambulatory care centers and diagnostic imaging facilities.

"Hospitals are crying foul that physicians own these facilities, but the concern we have is what's best for our patients," said AMA President John C. Nelson, MD, MPH. "Competition is the way to go."