02/16/2022 01:30 PM Senate LABOR & COMMERCE

                         SB  26-REPEAL CERTIFICATE OF NEED PROGRAM                                                          
                                                                                                                                
2:26:25 PM                                                                                                                    
CHAIR    COSTELLO      announced       the   consideration         of   SENATE    BILL    NO.    26                             
"An    Act    repealing       the    certificate        of    need    program      for    health                                
care    facilities;        making    conforming        amendments;       and    providing      for                              
an effective date."                                                                                                             
                                                                                                                                
She   noted     that    this    was   the   third     hearing     on   the    bill    and   there                               
was an amendment for the committee to consider.                                                                                 
                                                                                                                                
2:26:43 PM                                                                                                                    
SENATOR      MICCICHE       moved     to   adopt     Amendment       1   for    SB   26,    [work                               
order 32-LS0232\B.1].                                                                                                           
                                                                                                                                
                                                                                  32-LS0232\B.1                                 
                                                                                          Dunmire                               
                                                                                          2/16/22                               
                                                                                                                                
                                        AMENDMENT 1                                                                         
                                                                                                                                
                                                                                                                                
        OFFERED IN THE SENATE                         BY SENATOR MICCICHE                                                       
               TO:  SB 26                                                                                                       
                                                                                                                                
                                                                                                                                
        Page 6, line 5, following "APPLICABILITY.":                                                                             
               Insert "(a)"                                                                                                     
                                                                                                                                
        Page 6, line 8, following "Act":                                                                                        
               Insert ", unless the certificate of need is for an expenditure that exceeds                                      
                       (1) $5,000,000, as of July 1, 2024;                                                                      
                       (2) $7,500,000, as of July 1, 2026;                                                                      
                       (3) $10,000,000, as of July 1, 2028; or                                                                  
                       (4) $15,000,000, as of July 1, 2030;                                                                     
               (b)  On and after July 1, 2031, the Department of Health and Social Services may                                 
        not take action to revoke, enforce, or modify a certificate of need issued to a health care                             
        facility before the effective date of secs. 1 - 11 of this Act"                                                         
                                                                                                                                
CHAIR COSTELLO objected for an explanation.                                                                                     
                                                                                                                                
SENATOR      MICCICHE      offered      his    belief      that    it   was    important       for                              
people      to   be   able     to   recover      costs     based     on   a   set    of   rules.                                
Amendment       1   reflects       what    multiple       national      and    state     experts                                
agree    is   a  good    approach.      The    idea    is  to   look    at  the    lifespan      of                             
major      purchases       such     as    CT    and     MRI    scanners        and    give     the                              
individuals        that     made     those     investments        more     time    to    recover                                
their     costs.     The   amendment       provides      a  sliding      scale    such    that    a                             
$5   million      investment        gives     an   extra     year    after     the    effective                                 
date    of   the   bill;    a  $7.5    million      investment       gives    three    years;     a                             
$10    million       investment        gives     five     years;      and    a    $15    million                                
investment         gives       an     extra       seven       years.       DHSS      may      make                              
modifications         to  a   certificate       of   need    on  or   after    July    1,   2031.                               
He   noted     that    the   bill    already      prevents      additional       certificates                                   
of   need     after     the    effective       date.     The    amendment       provides       the                              
same     accommodation          for     individuals         that     have     the     foregoing                                 
levels of investment.                                                                                                           
                                                                                                                                
2:28:25 PM                                                                                                                    
CHAIR     COSTELLO      asked     if   other     states     have     a  stair-step        out    of                             
the Certificate of Need (CON) program.                                                                                          
                                                                                                                                
SENATOR      MICCICHE      replied      he   did    not   research       what    other    states                                
have     done.     His    office      worked      with    an    independent        group      that                              
contacted       national     experts.      He   noted     somebody      in  Alaska     wants     to                             
help    existing      entities       that    have    a  CON    recover      their    costs     and                              
this was the suggestion that was put forward.                                                                                   
                                                                                                                                
2:29:17 PM                                                                                                                    
CHAIR      COSTELLO        removed       her     objection.         Finding       no     further                                
objection, Amendment 1 was adopted.                                                                                             
                                                                                                                                
CHAIR     COSTELLO      asked    the    sponsor      if   he   had   any    comments      on   the                              
bill or the amendment.                                                                                                          
                                                                                                                                
2:29:44 PM                                                                                                                    
SENATOR      DAVID    WILSON,      Alaska     State     Legislature,        Juneau,      Alaska,                                
sponsor      of   SB   26,    explained       that    in   many    states,      CON    laws    and                              
regulations        were     suspended       during      the    COVID-19      pandemic.        This                              
has    allowed      health     care    professionals          flexibility        to   construct                                 
facilities,        expand     beds,    and    provide      critical      care    services.       He                             
noted     that    in  Alaska      these    rules     and   regulations        were    suspended                                 
through      the   Governor's       emergency       orders     and    the   expanded      powers                                
of    the    commissioner         of    the    Department        of    Health      and    Social                                
Services (DHSS).                                                                                                                
                                                                                                                                
SENATOR       D.    WILSON      said     his    office      provided       more      than     four                              
decades      of  data    to   show    that    CON   laws    have    not    stemmed     costs     or                             
improved       quality      or    outcomes.        It    has    been     shown     that     well-                               
functioning         health       care     markets       improve       access       to    quality                                
outcomes       and   stimulate        innovations        from    new    entrants       that    can                              
help lower costs of health care services for consumers.                                                                         
                                                                                                                                
SENATOR       D.    WILSON      offered      his     belief      that     repealing       Alaska                                
Certificate of Need laws would benefit Alaskan consumers.                                                                       
                                                                                                                                
CHAIR      COSTELLO       asked      for     a    brief      explanation         of    how     the                              
certificate        of   need    program,       which     the   bill    repeals,       currently                                 
works.                                                                                                                          
                                                                                                                                
SENATOR      WILSON     explained       that    the   Certificate        of   Need    law    is   a                             
regulatory        process      whereby       health      care    facilities        in    certain                                
areas      are    not     allowed       access      if    a    dollar      threshold        of    a                             
facility,       certain      equipment,        whether      it   is    physician       owned     or                             
Native       tribe      owned,       are     waived       from      going      through        this                              
regulatory        process.      It    is   a   lengthy      and    expensive       process       to                             
allow     new    entrants       to   the    health      care     market     if    they    exceed                                
certain thresholds. It is a type of limited entry.                                                                              
                                                                                                                                
2:32:35 PM                                                                                                                    
GARY       ZEPP,       Staff,       Senator        David       Wilson,        Alaska        State                               
Legislature,          Juneau,        Alaska,       added      that      for      health       care                              
facilities       and    services       in   Alaska,      the   government        must    approve                                
expansions.        SB  26   would    repeal     that    process,      which    is   what    about                               
one-third       of    people      in   the     country      enjoy.      About     130    million                                
Americans       live    without      certificate        of   need    and    the   health      care                              
markets in those areas function better than in Alaska.                                                                          
                                                                                                                                
SENATOR REVAK observed that the bill has a finance referral.                                                                    
                                                                                                                                
2:33:42 PM                                                                                                                    
SENATOR      REVAK    moved     to  report      SB  26,    work    order    32-LS0232\B,         as                             
amended,       from      committee       with      individual        recommendations           and                              
attached fiscal note(s).                                                                                                        
                                                                                                                                
CHAIR     COSTELLO      found    no   objection       and   CSSB    26(L&C)      was   reported                                 
from the Senate Labor and Commerce Standing Committee.