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Richardville Brings CON Reform Bill Back to Senate Floor

September 22, 2014

Senate Majority Leader Randy RICHARDVILLE (R-Monroe) on Tuesday dropped a bill that proposes reform for the Certificate of Need Commission (CON) while dredging up a long-standing conflict between the commission’s supporters and McLaren Health Care.

The bill, SB 1073, would also pave the way for a new McLaren hospital in Clarkston by way of the company moving 200 hospital beds from its Pontiac location, a controversial project the CON Commission turned down in 2012. In December 2013, Oakland County Circuit Court Judge Colleen O’BRIEN ruled against McLaren after the company filed suit to reverse the commission’s decision.

Under the legislation, any new hospital projects “located in a county with a population between 1,200,000 and 1,500,000” would not be required to obtain CON approval as long as construction began within a year of the bill’s passage, is located within an eight-mile radius of the hospital relocating its licensed beds and would not replace or expand upon existing hospital sites.

If Richardville has his way, he’d like to push approval of the McLaren project through the Legislature before the end of the year even if further reform talks have to wait.

“It reverses a carveout that happened years ago,” he told reporters Tuesday. “They made it so McLaren, one hospital in particular, couldn’t expand even if they wanted to. What this does is reverse that and allow them to expand the way they would have before that legislation came out.”

Opponents to the bill say a new McLaren hospital in Clarkston could oversaturate the hospital market and take away resources from McLaren’s Pontiac location. They also question the spirit of the legislation, which in their minds circumvents the CON process altogether.

“We support the CON process, and this bill is an unapologetic carveout for one health system of that process,” said Bret JACKSON, legislative director of the Economic Alliance for Michigan. “We don’t want the Legislature to make the health care situation worse.”

The Friends of Certificate of Need, a coalition of major Michigan businesses, labor and health care groups such as the Detroit Regional Chamber of Commerce, Blue Cross/Blue Shield of Michigan (BCBSM), UAW, Michigan Education Association (MEA), Meijer and Ford, roundly denounced the bill Tuesday and has already begun talks with legislators to oppose the legislation, Jackson said.

The CON Commission, situated within the Department of Community Health (DCH), is charged with approving the location of any new hospital or new piece of expensive medical equipment. The point is to prevent an overly competitive marketplace where hospitals in areas of need could be squeezed out of business.

Richardville told reporters “the Certificate of Need might be perfect just the way it is,” but noted the commission has been in place for decades and could require an update to make sure the commission’s actions are still relevant.

Other reform proposals include adding two members to the commission to “represent the general public” with no healthcare affiliation, one of whom would be designated as chair.

Richardville has support from Sen. Mike KOWALL (R-White Lake), who sponsored similar legislation in 2012, as well as Sens. Jack BRANDENBURG (R-Harrison Twp.), Mike GREEN (R-Mayville) and Jim MARLEAU (R-Lake Orion).

The current legislation is nearly identical to Kowall’s 2012 proposal, which floundered and died after passing committee even after the reference to the McLaren project was removed.

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