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Sponsor seeks to repeal certificate‑of‑need requirement for psychiatric services amid capacity debate
Summary
Delegate Robin Grammer proposed removing psychiatric services from Maryland’s certificate‑of‑need rules to encourage more psychiatric beds and providers; supporters cited national research that con laws reduce access, while Maryland officials argued staffing and other constraints matter more than the permitting process.
House Bill 7 35 would remove psychiatric services from Maryland’s certificate‑of‑need (CON) regime. Sponsor Delegate Robin Grammer argued CON laws limit competition, increase prices and reduce service availability; he cited national examples of states that have repealed psychiatric CON requirements and said Maryland needs more psychiatric beds to relieve emergency‑department boarding.
Supporters included national policy groups and legal advocates who submitted or gave testimony summarizing decades of empirical studies. Jamie Kavanaugh of the Pacific Legal Foundation and economist Matthew Mitchell cited a literature review indicating most empirical tests find neutral or negative effects from CON laws on costs, access and quality; Chad Reese of the Institute for Justice cited research specific to psychiatric services showing fewer psychiatric hospitals and fewer inpatient psychiatric clients per capita in CON states.
The Maryland Health Care Commission (MHCC) and other state officials opposed repeal. MHCC witnesses said Maryland has added acute psychiatric capacity in recent years but that staffing — not the CON review process — is the primary constraint on patient access; they pointed to roughly 200 additional acute psychiatric beds added in five years but reported that many beds remain unstaffed and unavailable. MHCC also said CON review timelines have been streamlined and argued the approval process helps ensure financial viability and quality of new facilities.
Opponents from nonprofit psychiatric providers described risks if for‑profit capacity expands but refuses Medicaid or indigent patients, and warned of unintended consequences such as cherry‑picking of low‑cost patients. Supporters countered that empirical studies do not show greater closures or worse safety net performance in states that removed CON limits.
Ending: The committee paused on immediate action; sponsors and MHCC signaled they would continue to debate specifics. Policymakers asked for additional data distinguishing staffing and workforce barriers from regulatory permitting barriers.
