Vermont lawmakers are addressing the state's burdensome process for building or renovating healthcare facilities, aiming to ease the regulatory requirements and expedite healthcare improvements. The proposed bill, H.96, is designed to raise the monetary thresholds that trigger the state's Certificate of Need (CON) process, which healthcare institutions must navigate when initiating major construction or purchasing expensive medical equipment.

At Rutland Regional Medical Center, hospital administrators have long wanted to combine the birthing center with the Women’s and Children’s Unit, which are currently separated by a hallway. "It’s a setup for poor patient experience," said Jonathan Reynolds, the hospital’s vice president for clinical operations. Combining the units would save an estimated $1 million annually in labor costs, but the process is hindered by the Certificate of Need requirement. Reynolds explained, “Rutland Regional is handcuffed, and we are unable to take the initiative right now to decrease the cost of health care because of the CON process."

The CON process in Vermont currently requires hospitals and healthcare facilities to obtain permission from the Green Mountain Care Board for any projects exceeding certain monetary thresholds, including construction, renovation, and expensive medical equipment purchases. As inflation continues to drive up construction costs and medical equipment prices, more healthcare projects are requiring certificates, which lengthen the approval process.

Under current law, any hospital construction or renovation exceeding about $3.8 million must apply for a CON, while non-hospital projects over $1.9 million are also subject to the process. For medical equipment, hospitals need a CON for items over $1.9 million, and non-hospitals for those exceeding $1.3 million.

The proposed H.96 bill seeks to raise these thresholds dramatically, exempting healthcare projects under $10 million from needing a CON, while medical equipment purchases would be exempt if the cost is under $5 million. Supporters of the bill argue that it will streamline the approval process, making healthcare improvements more accessible and affordable for residents.

“The dollar amounts that trigger the CON process are causing extraordinary burdens to hospitals, independent providers and other essential health care entities,” said Rep. Mari Cordes, D-Lincoln, who sponsored the bill. By increasing the thresholds, she added, the bill aims to reduce bureaucratic red tape and foster greater competition in Vermont’s healthcare market.

While the bill has garnered broad support from healthcare entities, including regulators and hospital groups, there are concerns that relaxing the CON requirements could compromise quality control. Owen Foster, chair of the Green Mountain Care Board, emphasized that the current CON system is designed to protect the public by ensuring that healthcare projects meet an appropriate need and are reasonably priced.

The current approval process for a CON can be time-consuming and costly, often taking months or even over a year. Applicants must provide extensive documentation justifying the need for their project, and public hearings and opposition from other healthcare entities can further complicate the process.

Reynolds expressed frustration with the current situation at Rutland Regional, where the proposed birthing unit consolidation is projected to cost between $5.5 million and $6 million. Under the current system, the project would require a CON, which could delay its start by at least a year. “If signed into law, H.96 gives us the breathing room to perform these types of projects,” Reynolds added.

The bill’s supporters believe that by relaxing CON requirements, the state can increase competition in healthcare, reduce costs, and enhance access to care, all while ensuring that more complex projects still undergo the necessary oversight. Devon Green, a lobbyist for the Vermont Association of Hospitals and Health Systems, stressed that the current CON process consumes valuable resources for both healthcare facilities and the Green Mountain Care Board. “Reforming the process would reduce cost and burden for the board and for health care providers,” Green said.

As Vermont lawmakers work to streamline the healthcare construction process, the proposed bill could serve as a model for balancing regulatory oversight with the need for cost-effective, timely improvements to the state’s healthcare system. If passed, H.96 could make significant strides in improving the quality of care, reducing construction delays, and cutting unnecessary administrative costs.

Originally reported by Peter D'Auria in Vt Digger.