MMHA 6451 Week 11 Health Policy Legislative Brief Example

Legislative Brief on Senate Bill 214: Amend Repeal of Surgery Center Review With Medicaid and Charity-Care License Conditions

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Walden University

MMHA 6451: Public Policy Analysis

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Month Day, Year

Legislative Brief on Senate Bill 214: Amend Repeal of Surgery Center Review With Medicaid and Charity-Care License Conditions

Senate Bill 214: Brief for the Health and Human Services Committee

Request: amend Senate Bill 214 to end certificate of need review for new surgery centers while attaching two conditions to their licenses, Medicaid participation and a charity-care share, tested first in a one-year verification pilot. This brief comes from an analyst at Cobalt River Health, a three-hospital system the bill affects; our analysis reports the system's own financial stake separately and does not use it to rank the options.

The Problem

Most outpatient surgery in the state is performed in hospital departments, where it is generally paid at higher rates than in freestanding centers, which perform many procedures more quickly (Munnich & Parente, 2014). Nearly all of the state's 38 certified surgery centers are in its two largest metropolitan areas, and 51 of 60 nonmetropolitan counties have none (Centers for Medicare & Medicaid Services, 2024). Certificate of need review contributes to this pattern, but payment rules and the supply of surgeons contribute as well, so changing review alone will not bring surgery to rural counties.

Alternatives Considered

Four alternatives were scored against five public criteria: cost to patients and payers, access outside metropolitan counties, quality, stability of safety-net hospitals and administrative feasibility, weighted 25%, 25%, 20%, 15% and 15%.

Table 1

Weighted Scores of the Four Alternatives (Scale of 1 to 5)

Who Gains and Who Pays

Repeal as filed rewards those who buy or invest in surgery: physician owners, insurers, employers and privately covered patients, all of whom gain cheaper settings. The bill's costs land on hospitals whose privately insured surgical cases help pay for uninsured patients; the capital's safety-net hospital, already operating closest to the line, is most exposed. Centers tend to draw the more profitable procedures (Plotzke & Courtemanche, 2011). Under the amendment, most of the gains remain, while new centers share part of the cost through Medicaid participation and a charity-care share. Some investors may choose not to open centers, so entry would be somewhat slower than under repeal.

What the State Would Take On

The amendment adds three state tasks: license conditions written and issued by the health planning agency, Medicaid enrollment and participation confirmed by the Medicaid agency, and charity-care reports collected and spot-checked by the licensing office. Costs fall into three categories: staff time, offset in part by ending certificate of need review for centers; modest changes to the existing annual facility report; and periodic spot checks of selected centers' reports. A one-year pilot would test verification before penalties apply, and if it fails, the condition would narrow to Medicaid participation alone.

Effect of the Amendment

The amendment keeps the bill's competition while ensuring that new centers serve Medicaid patients and share in the care of uninsured patients that hospitals now provide.

Attached Analysis: Summary of Sections

Problem definition. Describes where outpatient surgery is performed, price differences by setting and rural gaps, using the CMS Provider of Services file, AHRQ ambulatory surgery data and the planning agency's decision records, and separates the contribution of review from payment rules and surgeon supply. A national study of states that dropped their programs saw spending stay roughly on trend, which also cast doubt on how much the programs had held it down (Conover & Sloan, 1998).

Alternatives. Sets out repeal, a higher threshold, the conditioned license and no change, each with its mechanism, required statutory change, implementing agency and precedent, and explains why a moratorium was excluded.

Criteria. Defines the five public criteria with indicators and sources, and reports the system's own margin separately and unweighted, explaining why that margin never enters the public score and listing three criteria that were considered and set aside.

Stakeholders. Traces repeal's effects on fourteen groups by direction, size and likely response.

Scoring matrix. Scores each alternative on each criterion with an evidence note and tests the ranking under alternative weights; the conditioned license leads under both weightings tested.

Feasibility. Rates the conditioned license moderate on political and financial feasibility and low to moderate on administrative feasibility, identifies charity-care verification as the weakest link and proposes reporting through the existing facility report with random audits.

Recommendation and defense. Traces the recommendation to the scores and stakeholder findings, answers objections from independent surgeons, the planning agency and those who suspect the system's motives, and names the developments that would change it.

The analysis follows a standard sequence for policy analysis (Bardach & Patashnik, 2020) and is offered to committee staff in full. Its central finding is that the state can gain most of repeal's benefits without shifting the full cost of uninsured surgical care onto the hospitals least able to absorb it, provided the conditions are designed to be verified. The system's analysts are available to walk staff through any section, including the scoring, before the committee hearing.

Two cautions accompany the attachment. The scores are ordinal judgments, and the gap between the conditioned license and repeal as filed is small; the stronger finding is that both outperform the current program. And several counts in the problem section are estimates built from partial data, because no statewide claims file covers every payer and freestanding centers report fewer outcomes than hospitals. Committee staff who want to test the analysis should start with those two points. If the committee prefers repeal as filed, the analysis suggests a smaller step that would still help: requiring new centers to enroll in Medicaid, which the state can verify through claims at little cost. That single condition would keep most of the access gain the analysis attributes to the amendment and could be added to the bill without new reporting.

References

Bardach, E., & Patashnik, E. M. (2020). A practical guide for policy analysis: The eightfold path to more effective problem solving (6th ed.). CQ Press.

Centers for Medicare & Medicaid Services. (2024). Provider of Services file: Hospital and non-hospital facilities [Data set]. U.S. Department of Health and Human Services.

Conover, C. J., & Sloan, F. A. (1998). Does removing certificate-of-need regulations lead to a surge in health care spending? Journal of Health Politics, Policy and Law, 23(3), 455-481. https://doi.org/10.1215/03616878-23-3-455

Munnich, E. L., & Parente, S. T. (2014). Procedures take less time at ambulatory surgery centers, keeping costs down and ability to meet demand up. Health Affairs, 33(5), 764-769. https://doi.org/10.1377/hlthaff.2013.1281

Plotzke, M. R., & Courtemanche, C. (2011). Does procedure profitability impact whether an outpatient surgery is performed at an ambulatory surgery center or hospital? Health Economics, 20(7), 817-830. https://doi.org/10.1002/hec.1646