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CON law faces new scrutiny

“The executive branch is saying we need it, but the legislative branch needs to make the changes.” — Nancy Heaton, CEO of the Foundation for Community Health and Certificate of Need Task Force member

SHARON — Nancy Heaton has had a front row seat in three Sharon Hospital Certificate of Need (CON) applications over the past 19 years.

She was appointed CEO of the Sharon-based Foundation for Community Health (FCH) shortly after that agency was created in June of 2003 by the conversion of Sharon Hospital to a for-profit hospital. Since 2003, FCH has focused its energies on improving access to health care and health-related services in the rural Northwest Corner of Connecticut and parts of New York.

During that time, Sharon Hospital was purchased and repurchased by several different private equity groups, and then in 2017 it was purchased by the New York-based nonprofit hospital system, Health Quest, which a year later merged with Western CT Health Network and became Nuvance Health.

According to Heaton, FCH donated $3 million of the $5 million price tag for that transaction “in the hope that reconversion of the hospital back to a community asset would result in increased attention to our community.

“It was widely perceived that hospital services were slowly being eroded and downsized, with increasing shortage of all types of providers and services,” she recalled.

As part of the grant, her agency agreed to select and nominate new community Board members to more smoothly, and quickly, connect the New York-based system to the community.

Recently, Heaton’s, and FCH’s, watchdog status reached new heights.

On the recommendation of state Rep. Maria Horn (D-64), Heaton was appointed to the newly established Governor’s Certificate of Need Task Force, which held its inaugural meeting Aug. 11.

“I really thought I might have something unique to say just because of my time here,” said Heaton, who is serving on two subcommittees. “I got my job because of the CON process.”

Response to concerns

The 16-member task force, which is managed by the Insurance and Real Estate Committee of the Connecticut General Assembly, was created in response to concerns that large, consolidated hospital systems are closing services, raising prices and are not sufficiently responsive to community needs.

The establishment of the task force was included in the 2022 state budget and the group is directed to study and make recommendations to the Office of Health Strategy (OHS) with the goal of improving the state’s CON process.

The CON program regulates certain health-care providers, including hospitals, requiring that they seek state approval prior to making major changes. These potential changes include mergers, significantly large capital investment in new equipment or facilities, changing access to services or discontinuing a medical service. Recommendations are due to the General Assembly by Jan. 15, 2023.

Heaton’s role on the task force comes at a time when Nuvance is seeking permission from OHS to shutter Sharon Hospital’s Labor and Delivery unit and replace its Intensive Care Unit with a Progressive Care Unit.

She said she has become increasingly interested in how the CON process can be improved to better serve the needs and interests of all Connecticut residents, especially those in her rural area of the state, through a “more coherent and streamlined process that is built on a much clearer set of expectations.”

New laws better define ‘termination of services’

On May 7, Gov. Ned Lamont signed into law Connecticut’s fiscal year 2023 budget, and among the changes, it made modifications to the CON process and gave new authorities to OHS.

As a result, the law now defines “termination of services” to mean the cessation of any services for a period greater than 180 days.

Heaton hailed the measure as “huge.” In the past, she said, an entity could use the term “suspension of services” for extended periods of time, potentially for years. “There really had been no clear definition.”

Additionally, the new law created a scaled CON application fee ranging from $1,000 to $10,000 based on the cost of a proposed project. Under prior law, all CONs required a flat $500 fee.

Although recommendations from a 2016 CON task force were never acted upon, Heaton is optimistic that the renewed effort will meet with success and support from state lawmakers.

A daunting challenge

According to a recent statement issued by the nonprofit Universal Health Care Foundation of Connecticut, “Given the nature of the topics under discussion and the power of the hospital industry in Connecticut, developing recommendations that result in legislative change could prove to be quite challenging.”

Several individuals recommended by Universal have been appointed to the new CON task force. “We plan to push for strong recommendations and subsequent legislation that will support the needs of local committees,” the foundation reported.

State Rep. Kerry Wood (D-29) and state Sen. Matt Lesser (D-9) are serving as co-chairs of the task force and two ranking members of the insurance committee, state Rep. Cara Pavalock-D’Amato (R-77) and state Sen. Tony Hwang (R-28), are also participating.

The membership also comprises several hospital representatives as well as consumers, providers and advocates for health equity, access and quality.

Some of the questions the task force has been asked to investigate include analyzing services and facilities and their impact on quality and underserved populations, authorizing OHS to require investments to address community needs, guaranteeing local community representation on hospital boards and setting standards to measure quality indicators after consolidations.

The task force is also looking at enacting higher penalties for noncompliance and increasing the staff needed for enforcement, the attorney general’s authority to stop activities as the result of a CON application or complaint, and the ability of representatives of the workforce and the community to intervene or appeal decisions.

Greater focus

on access, equity

Heaton said she is optimistic the time is right for a CON overhaul, particularly when three hospitals in Connecticut, including Sharon Hospital, Windham Hospital and Lawrence + Memorial in New London, are seeking to close labor and delivery and scale back on services.

“It’s the perfect storm. I do think there is more momentum this time,” said Heaton.

The major difference this time versus last time, noted the FCH official, is that the prior task force focused primarily on health-care costs and how to keep them down.

“But now, they are really looking at access and equity. You can see that more in the language. I think they are going to apply these lenses, and I’m excited about that. The executive branch is saying we need it, but the legislative branch needs to make the changes.”

Task force member John Brady, a retired registered nurse and vice president of AFT CT, the teachers’ federation, noted during the group’s organizational meeting that he hopes the effort will arm the Office of Health Strategy as well as the attorney general’s office, “with the power they need to enforce what I think is the spirit of the CON process.”

In March 17 testimony in support of House Bill 5449: An Act Concerning Certificate of Need Process, Lynne Ide, director of program and policy for Universal Health Care Foundation of Connecticut, urged support of a stronger version of the bill.

“The issues are not new, yet our state has not given the Office of Health Strategy the proper resources and tools to crack down on bad actors, and protect our health, our choices of providers and our pocketbooks. We need the Legislature to act this year. We cannot wait.”

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