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.