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Sen. Stutz urges repeal of CON requirements for obstetrics, psychiatric beds to spur rural care
Summary
Senator Stutz used a Senate committee hearing to press for rolling back Alabama''s certificate-of-need rules for obstetric and psychiatric services, arguing the process delays care and imposes high legal costs on hospitals; the bill was carried over for off-season negotiation.
Senator Stutz spoke to a Senate committee about S.B. 285 on the Certificate of Need process, arguing the law impedes hospitals from adding obstetric and psychiatric beds and imposes unnecessary costs. "We've got some crises with health care providers, with hospitals, particularly in rural areas across the state," Stutz said. "They're an unnecessary middle man controlling health care providers and they don't provide any health care and they take millions of dollars a year out of the health care system in the state of Alabama."
Stutz framed the bill as a targeted effort to make it easier for hospitals to add services that are in short supply, particularly obstetrics and psychiatric care. He said his experience as "a practicing physician for 32 years" and conversations with hospital administrators informed the bill. He described one local hospital that spent "over $200,000 in legal fees negotiating the CON process" to add a small number of psychiatric beds, despite facing no opposition.
Stutz summarized the historical rationale for CON laws, citing the Hill-Burton Act and later federal requirements tied to Medicare and Medicaid. He said the National Health Planning and Resource Development Act of 1974 led many states to adopt CON rules, and that federal repeal of parts of that program in the 1980s reflected its failure to control costs. "States with CON laws have 30% fewer rural hospitals per capita than states that don't have CON laws," he said, adding that Alabama is "one of 8 states with the most restrictive CON laws across six broad categories."
Stutz said he filed S.B. 285 to force discussion and to pursue a narrower approach focused on expanding obstetric and psychiatric services and easing barriers for rural hospitals. He acknowledged political obstacles and told the committee he expected the bill would not advance in the current session but hoped stakeholders would meet during the off-season to draft model legislation. The committee pulled the public hearing and Stutz said the bill will be carried over for further work in the off-season.
The hearing did not record a formal vote or committee action to approve the bill; committee members did not make a motion to advance S.B. 285 during the segment in the transcript.
