At Rutland Regional Medical Center, administrators have long wanted to combine two different parts of the hospital: the birthing center and the Women’s and Children’s Unit. 

The two units are separated by a hallway, meaning that patients are moved to a new unit shortly after giving birth — “a setup for poor patient experience,” Jonathan Reynolds, the hospital’s vice president for clinical operations, told a Vermont House committee last month. 

And, because having two separate units means that the hospital must maintain two different pools of practitioners with overlapping skill sets, combining them would save an estimated $1 million in labor costs annually. 

But consolidating the two units will incur an additional expense: that of obtaining a certificate of need.

Under state statute, Vermont health care institutions are required to get a certificate of need — effectively, a legal permission slip — anytime they want to build, renovate or buy facilities or obtain medical equipment that are more expensive than certain threshold amounts. 

But as prices for construction and medical equipment rise, more and more projects — including the consolidation of Rutland Regional’s two units — require such certificates, tying up health care facilities and state regulators in lengthy and expensive bureaucratic processes. 

“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,” Reynolds told lawmakers.

Now, lawmakers are seeking to relax those requirements. Last week, Vermont’s House passed a bill, H.96, that would increase the monetary thresholds needed for a certificate of need — a move that supporters say will lower health care costs and make care more accessible to state residents. 

“The dollar amounts that trigger the CON process are causing extraordinary burdens to hospitals, independent providers and other essential health care entities,” Rep. Mari Cordes, D-Lincoln, the bill’s lead sponsor, said on the House floor March 11. 

Certificate of need regulations, which exist in most states, are intended to reduce unnecessary health care spending and avoid duplicative medical services. 

The process “is intended to protect the public, and it does so by ensuring that projects that are built have sufficient need and are appropriately priced,” Owen Foster, the chair of the Green Mountain Care Board, said in an interview. 

In Vermont, certificates of need are required when a hospital or health care facility seeks to build a new facility, renovate an existing one, or purchase an expensive piece of equipment. If a project hits a certain dollar threshold, hospitals or other health facilities must apply to the Green Mountain Care Board for permission. 

Currently, for hospital construction or renovation, a certificate of need is required for all projects that cost more than about $3.8 million. Approval is also needed for non-hospital construction or renovation over $1.9 million.  

And certificates are also required for purchases or leases of single pieces of medical equipment that cost more than roughly $1.9 million for hospitals, or $1.3 million for non-hospitals.

Those limits increase annually by an inflationary factor. But the cost of construction and medical equipment has far outpaced those inflationary increases — something that the bill would address.

If passed, the proposed legislation would significantly raise those cost thresholds. Construction and renovation projects, both for hospitals and non-hospitals, would require a certificate of need only if costs run over $10 million. And the acquisition of new medical equipment, both by hospitals and non-hospitals, would only require certificates of need if the cost exceeded $5 million.

With little opposition, the bill has drawn support from health care entities that are often at odds with each other: advocates, regulators, and hospitals. 

The certificate of need process eats up “resources, both in money and time, both for the Green Mountain Care Board and for hospitals,” Devon Green, a lobbyist for the Vermont Association of Hospitals and Health Systems, said in an interview. 

Reforming the process, as envisioned by H.96, would “reduce cost and burden for the board and for health care providers,” Foster, of the Green Mountain Care Board, said. “And it would increase competition, while still providing oversight” over more complex projects.

Getting a certificate of need can take months, or even, in the case of one recent construction project, over a year. And the process requires applicants to provide reams of documentation about their project’s benefits, costs, projected utilization and more. Other people, organizations or health care entities can weigh in too, and board members can pose multiple rounds of questions and attach conditions to their approval of an applicant’s project.  

“In terms of the current certificate of need process right now, I think there’s a general feeling of, it can be administratively burdensome,” Green said. 

That’s the case at Rutland Regional Medical Center. The consolidation of the birthing unit with the women’s and children’s unit is projected to cost between $5.5 million and $6 million — enough to require a certificate of need under current law, but not under the proposed reforms.  

As it currently exists, “I would wager that the CON process would delay our start of this consolidation of two units by at least a year, if not longer,” Reynolds, the hospital vice president, said last month. 

But if signed into law, he said, H. 96 “gives us the breathing room to perform these types of projects.”