Certificate-of-need laws, which require healthcare providers to receive government permission to build facilities, are an obstacle for ASC growth in many markets.
While many states are working to change these laws, some still pose barriers for ASC leaders.
"There are still many states that have pretty restrictive certificate-of-need laws," Philip Blair, CEO of Surgery Center Services of America, told Becker's. "It would just be a huge gold rush and avenue for lowering healthcare costs if governments could give these physicians an opportunity."
Some states in the Northeast, for example, have seen limited ASC growth because of the regulations.
"Most of the New England states have a certificate-of-need or determination-of-need requirement to open an ASC," Prashanth Bala, vice president of ASC operations at Quincy, Mass.-based Shields Health Care Group, told Becker's last year. "Though this is not different from some other markets nationally, the regulations have led to fewer ASCs per capita than anywhere else in the country."
Here are three examples of certificate-of-need laws potentially hindering growth:
1. New ASC management company SurgNet, based in Nashville, Tenn., is struggling to grow in its home state due to certificate-of-need laws. Tennessee is one of several states that enforces certificate-of-need laws for healthcare companies looking to expand. While the company has made two acquisitions in its first two months, it is struggling to do business in other states.
2. Ophthalmologist Jay Singleton, MD, who owns an ophthalmology practice in New Bern, N.C., is challenging the state's certificate-of-need laws in a lawsuit that claims he cannot perform procedures at his ASC. Under current law, he can perform only an "incidental" number of surgeries at the center. He must instead perform procedures at nearby hospital CarolinaEast, which charges substantially more per procedure for patients.
Additionally, Dr. Singleton cannot begin the certificate-of-need application process because state regulations have determined the community does not need another ASC.
3. In May, Hartford (Conn.) HealthCare was approved to acquire two ASCs in Connecticut, but the Office of Health Strategy, which approved the deal, included stipulations such as prohibiting the entities from charging facility fees. Hartford HealthCare had sought a certificate of need for the acquisition of both facilities.