Vermont House Advances Bill to Raise Healthcare Project Thresholds to $10 Million for Certificate of Need Review

Vermont lawmakers are moving to ease regulations for healthcare facility development, with the House recently passing a bill to significantly raise the financial thresholds for Certificate of Need (CON) reviews. This legislative push addresses long-standing concerns from healthcare providers, including sentiments highlighted by Lawson Mansell, who stated in a social media post that Vermont has "some of the most onerous requirements" regarding these laws. The proposed changes aim to reduce administrative burdens and foster more accessible and cost-effective healthcare services across the state.

Certificate of Need laws, in place in Vermont since 1979, require healthcare providers to obtain state approval before undertaking major capital expenditures, expanding services, or building new facilities. Proponents argue these regulations control healthcare costs by preventing unnecessary duplication of services and ensuring community need. However, critics contend they stifle competition and create bureaucratic hurdles for essential healthcare improvements.

The current CON process has been cited as administratively burdensome and a source of significant delays for healthcare institutions. For instance, Rutland Regional Medical Center faced a year-long delay for a project to consolidate its birthing center and Women’s and Children’s Unit, a move expected to save $1 million annually in labor costs. Jonathan Reynolds, the hospital’s vice president for clinical operations, noted that the hospital was "handcuffed" from decreasing healthcare costs due to the CON process.

House Bill 96, which passed the Vermont House, seeks to substantially increase the monetary thresholds that trigger a CON review. Under the proposed legislation, construction and renovation projects for hospitals and non-hospitals would require a certificate only if costs exceed $10 million, up from previous thresholds of approximately $3.8 million and $1.9 million respectively. Similarly, the acquisition of new medical equipment would only necessitate a CON if the cost surpassed $5 million.

The reform efforts have garnered broad support from various stakeholders, including healthcare providers and regulators. Rep. Mari Cordes, the bill's lead sponsor, emphasized that the existing dollar amounts create "extraordinary burdens to hospitals, independent providers and other essential health care entities." Owen Foster, chair of the Green Mountain Care Board, echoed this sentiment, stating that reforming the process would "reduce cost and burden for the board and for health care providers" while potentially increasing competition.

While Vermont's CON program aims to ensure a sustainable healthcare system, its regulations have led to lengthy approval processes, sometimes extending over a year for complex projects. The state also maintains specific CON restrictions, such as a moratorium on new home health agencies and services until January 2025. The ongoing legislative efforts reflect a statewide push to balance regulatory oversight with the need for agile and responsive healthcare development.