Lawmakers hear testimony on bill to raise CON threshold to spur ambulatory surgery centers

The Joint Standing Committee on Health Coverage, Insurance and Financial Services heard extensive testimony on LD 1890, a bill to increase the Certificate of Need threshold that triggers review for establishing new health-care facilities.

Representative Bob Foley introduced an amendment that replaces the original exemption with a new indexed monetary trigger of $5,000,000 for new health-care facilities. Foley said the 2012 $3,000,000 threshold has not been updated for medical inflation and argued the change would encourage ambulatory surgical centers (ASCs) that provide many procedures at lower cost than hospital outpatient departments.

Why it matters: Proponents — including independent physicians, purchasers, insurers and construction professionals — argued that higher thresholds and indexing would reduce barriers to entry, expand rural access, and put downward pressure on prices. Opponents and some cautious stakeholders warned that raising thresholds could concentrate new investment in more profitable, urban markets and that CON review plays a role in ensuring equitable distribution of services.

What supporters said

- Dr. Elizabeth Pierce, an otolaryngologist with an independent practice, said hospital surgical privileges are difficult for small independent providers to obtain and that ASCs can reduce delays and costs for patients; she requested amendments to allow existing ASCs to expand without facing more restrictive rules.

- Trevor Putnacki of the Healthcare Purchaser Alliance cited studies that found higher prices associated with CON programs and argued that increasing competition from ASCs can lower spending per service.

- Construction and industry witnesses argued that contemporary construction and equipment costs and workforce constraints make the $3,000,000 threshold obsolete; a Yarmouth contractor said comparable projects now approach $7.5 million to $10 million in some estimates.

What hospitals and neutral voices said

- Jeff Austin of the Maine Hospital Association described the question as a "Goldilocks" problem: a threshold must allow appropriate review of significant projects while not creating unnecessary barriers. He noted some ASCs have been built or are being permitted under current rules and urged caution in seeking balance.

- The Office of Affordable Health Care told the committee the amendment aligns with the commission recommendation and would retroactively apply the indexing to update the unindexed category.

Numbers and implementation

- Current unindexed threshold in statute for establishing a new facility: $3,000,000 (transcript).

- Commission staff cited an indexed equivalent this year of roughly $4.2 million. Representative Foley proposed $5,000,000 and intends annual indexing thereafter.

- Witnesses and interested parties suggested alternatives (some urged $7.5M or $10M) and noted the statute already contains higher indexed thresholds for other categories (general capital-expenditure threshold referenced in committee materials is currently approximately $14.7M for larger projects).

Quotes from the hearing

"My amended proposal establishes a new limit set at $5,000,000 and establishes and indexes it going forward," Representative Bob Foley said, adding that raising the threshold is intended to encourage development of ASCs in rural and underserved areas.

Trevor Putnacki said: "We think increasing options in the market will put downward pressure on price," citing comparative price data from other states.

Committee action and next steps

The committee closed the public hearing without a work-session vote. Chairs and staff said draft language and fiscal notes are available; legislators signaled a desire to move some narrower items quickly this session. No final committee action on LD 1890 occurred at the hearing.

Ending

The committee will review submitted testimony, the commission report and draft language before scheduling a work session. Stakeholders on both sides requested additional analysis on distributional effects, quality safeguards, and fiscal impacts before the committee reports legislation to the floor.