Here's what's behind 3 recent ASC certificate-of-need disputes

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There are 35 states in the country that have a certificate-of-need program — laws designed to control healthcare costs by restricting competition for duplicative services and determining whether capital expenditures meet a community need.

Here are three proposed ASCs recently facing opposition in securing a certificate of need:

1. Elgin, Ill.-based Advocate Sherman Hospital's permit to build a $12.7 million ASC was recently rescinded by an Illinois review board after originally being approved in 2017. 

The permit was renewed in March 2019, and hospital officials sought a four-month renewal in 2021 to update the ASC to two operating rooms. 

At the time the proposed ASC was approved, it was a joint venture with Deerfield, Ill.-based Surgical Care Affiliates and local physicians. Since the original approval, Advocate Sherman bought out Surgical Care Affiliates; the hospital attributes the ASC delay to the SCA buyout, a series of hospital mergers and the COVID-19 pandemic. 

Illinois board members have said Advocate Sherman hasn't shown due diligence and that the permit is outdated. The hospital plans to submit another application for a permit. 

2. An opposing surgical group is threatening to sue some of its own members after Iowa City, Iowa-based Steindler Orthopedic Clinic requested to postpone its certificate-of-need hearing for a new $17.9 million ASC.

The opposition comes from Johnson County Surgical Investors and Iowa City Ambulatory Surgical Center, who sent a letter to the State Health Facilities Council urging it to deny Steindler's CON for the planned 35,880-square-foot ASC.

Johnson County Surgical Investors and the ASC said the Steindler project is unnecessary and unlawful because 13 of Steindler's physicians are also part owners of Johnson County Surgical Investors. They argue that agreements physicians signed prohibit them from owning, operating, managing, financing, leasing or investing in any other ASC or providing management services to a competitor.

3. Pinehurst (N.C.) Surgical Clinic on Oct. 4 petitioned Gov. Roy Cooper to reverse the denial of its proposed ASC in Sanford. The North Carolina Department of Health and Human Services rejected Pinehurst's unopposed plans to build a surgery center that would cost $6 million to $12 million in September, citing a surplus of operating rooms in Lee County.

Pinehurst wants to build an ASC there for patients "needing that level of additional care" — Pinehurst officials told Becker's that the surgery center will accommodate patients in the area who are traveling long distances to receive specialized care. The proposed surgery center would specialize in orthopedic procedures such as knee replacement and offer overnight capabilities for those who wish to avoid staying at a hospital.

The governor's office will decide whether it will overturn the North Carolina Department of Health and Human Services' decision. Pinehurst told Becker's that the ASC has already received the support of other legislative officials. If the decision is upheld, Pinehurst can reapply for a certificate of need in 2022. 


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