This Study is Being Conducted as a Follow-Up to the Joint Commission on Health Care's Work in 2000 to Develop a Plan to Eliminate the Commonwealth's Certificate of Public Need Program

Senate Bill (SB) 337 of the 2000 Session of the General Assembly directed the Joint Commission on Health Care (JCHC) to develop a plan to eliminate the Commonwealth's Certificate of Public Need (COPN) program. In developing the COPN deregulation plan, the JCHC recognized that one of the protections COPN provides to hospitals is the ability to "cost-shift" reimbursement received from paying patients to help offset the cost of providing care to persons who have no financial means (e.g., indigent and/or uninsured patients), and to subsidize the cost of certain services which generate relatively little revenue. In a deregulated environment in which services that currently are provided primarily in hospital settings are available from other providers outside of the hospital, the ability of hospitals to provide services for the indigent/uninsured is diminished in proportion to the number of paying patients who begin receiving these services from other providers.

To address this issue, the deregulation plan recommended by the JCHC included provisions to help cushion hospitals from the impact of being less able to cost-shift and subsidize indigent care/low revenue-generating services, and undergraduate medical education (at the academic health centers). One of the provisions included in the JCHC's three-phased deregulation plan called for increasing Medicaid eligibility for adult parents from the current level of 32% of the federal poverty level (FPL) to 100% FPL during Phases II and III as a means of increasing the number of persons with health insurance. Another of these provisions was a directive for the JCHC to study (during Phase I) the feasibility of securing a waiver under the State Children's Health Insurance Program (SCHIP) to cover uninsured adult parents with incomes between 100 and 200% FPL as a further means of increasing the number of persons with health insurance. While the JCHC's deregulation plan (as provided in SB 1084/HB 2155) was not approved by the 2001 Session of the General Assembly, at its May 1, 2001 meeting, the JCHC directed staff to complete this study.