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House | April 20, 2015 | Committee Room | House Health

Full MP3 Audio File

I will call this Health Committee meeting to order. I would ask that you please take your seat and we will get started because we do have a rather important and lengthy agenda, although we only have one item on the agenda. Our Sergeant-at-Arms for this evening's meeting is Young Bae over here Bill Morris and back behind me and Jim Morraine, thank you for being here and for what you are doing for all our citizens of North Carlina. Okay, we have one bill before the committee and you will notice that as the week goes by, that this committee has a lot of bills to be heard before crossover, we will be having special meetings again next Monday to our meeting to make sure that we get all those that we need to be heard in before the session and the deadline that we are up against, so stay tuned for future agenda updates. I will call on Representative Avila, to just briefly give you HB 200 Amend Certificate of Need Laws and then we're going to allow this to be a discussion among our members, but we're going to have two presentations, and we'll come to that after Representative Avila. Thank you Mr. Chairman and first of all I would like to say thank you again to the Chairs of this committee for allowing me to ask for slightly different approach in terms of bringing this bill before you for a very simple reason and that is, we're un-doing something in government so we don't really need to go it through section by section explanation of it. What more concerns people is what are the effects of un-doing this going to be? And that's why we have asked to have the pros and the cons brought before you today by people who are intimately involved in the issue and be able to ask them questions. I also want to thank my sponsors Representatives Collins, Bishop and Michaux, and Representatives Bishop and Michaux are here, and if they'd like to make comments at this time I'd like to recognize them for that, or later which ever they prefer. Thank you Mr. Chairman. I'll hold comments until after the presentation and participate in the discussion. OK. OK, thank you. OK, thank you Representative Avila. We'll first call on Connie Wilson, who will come up and we've given 10 minutes to each of the presenters, and then if we withhold the questions until after the presentations then we'll come back and allow the committee to ask the questions to help clarify any open or outstanding issues. Miss Wilson. What you said right there. Thank you very much Mr. Chairman. My name is Carnie Wilson. For those of you that I haven't bugged and you don't know me, I represent the Orthopedic Association in the Ophthalmologists here in North Carolina, and since 1997 I have been working on this issue off and on, and I bet we have some pages in here that aren't even that old. And I want to kind of give you a broader view of where we are in health care in North North Carolina and I took delivery of outpatient surgery services. When I was five years old, back in 1964 I had to have a tonsillectomy and they took out my adenoids just in case. You know how it was back then, get in there and just get everything out. I had to stay in the hospital overnight. And what happened fast forward all these years we're talking 50 years, almost 72-73% of all procedures now are done outpatient surgery remember it didn't use to be that way, and with this new change that's occurring we have a current regulatory system in place, the Certificate of Need, that artificially forces folk to go to facilities that are higher cost that traditionally were used like operating rooms that you would stay overnight. In fact, we don't have a category technically for AST operating rooms, we just have operating rooms, and so with the changes that have gone on in our health care economy, the citizens of North Carolina have been forced

to go into the higher cost facilities. And what you all have here is a chart, this one actually has Carolina's Medical Center on it, and it's your second handout that's in there. And you'll see the yellow, are procedures that are done, you'll see the percentage that's done in a higher cost hospital settings, and the blue is done and outpatient surgery, and you can see where the specialties are. Statewide like I mentioned, it's about 70% that are looking at that hired cost amount that they have to use. And so what we're finding in different areas, and you can see on the back of this handout, this is just Charlotte. See, House health and reforms CON now on the back, and we've got a lot of handouts for you. And you can see in Charlotte at the Gateway Center in Concord for an ACL repair it's $10, 000, and this is the Blue Cross Blue Shield cost estimator. This is straight from their website. The highest cost is $28, 834, so you've got almost three times higher. Now, I have to give Blue Cross Blue Shield a kudos here because for the last three years when we've been working you on this issue, we haven't been able to tell you what the cost differential is, and these are averages, and there are sometimes it  doesn't look like all the providers are there when I look at the different districts, but it gives you a good general estimate and every district is different and you'll see that in your hand out. So as we started going through this we're thinking, okay we've got 70% of procedures that are now forced into these higher cost settings, because we don't have the ASC's available. 24 states in the country do not require a CON for outpatient surgery. North Carolina is not only one of those that requires them, but also is one of the most restrictive, so what you end up with  CON is that there are fewer places that they can compete with the hospital home facilities that charge the higher hospital facility fee. And it doesn't deal anything with quality, because CON only deals with who gets to compete and who doesn't compete. All these ASC's that are currently out there, and will hopefully be built once we pass this bill complete are required to be licensed and accredited here in North Carolina. Medicare gives great oversight into the qualities that's going on there. So we're not talking anything about quality when we talk about doing away with C. O. N. All we're talking about, is the ability to compete. Now there are folks that are out there that say, if you go ahead and open up, like Representative Avila and Representative Mickey Michaux bill, and Representative Bishop's bill if you go ahead and pass this bill, there's going to be ac ASC on every corner. But we also have a chart in here that talks about the 24 states that are currently regulated, and it gives you the numbers in those states per 100, 000 and you can see there's no state where there's one on every corner. So we've got the data that shows this is a normal thing to do. It's also normal because every industry out there right now, has have to go through major changes. I remember when I first bought a calculator 25 years ago, remember how much calculators used to cost? It's the same way in every industry, changes have occurred. But because we do not allow the regulations to change in North Carolina, on who gets to compete, and artificially changes the dynamics and makes the citizens on your district pay more. And what you're going to see, there's a chart here we've got stapled together, can you guys see that in your folder? See it says, a Blue Cross Blue shield Cost Estimator on top. And for each one of your districts, we've gone through and just polled a few procedures, and like I mentioned to you this isn't science, it's not exact, it's an estimate, it's off their website, for Mecklenburg County you may have 40 groups that do the procedures, Representative Dobson, I had to go out 60 miles from your home to find enough providers to do procedures for the different procedures we used in your handout. So you can see yours actually goes up to Ashville, it goes to Catawba, it's all over the place because you're currently in the middle of nowhere. Wake County, there's a lot so if you want to, it's a beautiful area of the State though. But you can see from these cost estimators that typically, if you have an ASC it's the lowest, if you have the highest one it's usually what's called an HOP, a Hospital Outpatient Department HOPD is the acronym.

So if just start going through there, you'll get an idea of the cost differential that your patients are looking at. One of the arguments that's used against doing away with CON in the bill, House Bill 200 before you does away with CON for ASC's. The argument is that for rural hospitals it will put them out of business. And so in House Bill 200, there is a provision in that bill through licensing that says, any counties that have less than 100, 000 people in it, the only way that an ASC can be opened up in that county is if the local hospital approves it. So what that actually does, is this local hospital now that may want to be able to open up an ASC. And we've got some out-migration numbers that I can go over with you in a little bit. But this local hospitals now would have the authority to be able to open up their own ASC if they think that its really necessary. Right now many of these raw counties are saying 40, 50 60, sometimes 90% of their ASC procedures are being siphoned off to the larger hospital next door. And last but not least, what is argued about us is that the doctors will cherry pick in the hospitals are there, 24/7 we're doing all this charity care, and the doctors that I represent remind me of over and over again, Is it the doctors who actually do the procedures in these hospitals? And we're the ones actually dong the charity care? In this bill there is something that's currently being used by the Division of Social Services, I kind of get their name mixed up sometimes, but for some demonstration for AFC's that requires a 7% charity care, which is highly unusual but we require it, and you'll see a chart here that says charity care for all other hospitals and counties with over 100, 000. This is for AFC's where they're doing their hospital's own AFC's, how much they're doing in charity care, and on average it comes up to 3.9%. So what we're saying is we're putting our money where our mouth is, we're willing to do 7%, and that means we're going to be paying property tax, we're going to be paying income tax, we're going to be paying sales tax and we're going to be reimbursed at a lower rate. So we're having all those things that are basically dinging us against what the hospitals are able to do. And all we are asking you todoy is to allow us to compete. And this bill is in a set up just for physicians to come in and they have these ASE's, it will also allow hospitals could use them if they wanted to, they could partner and private companies could come and do them but it turns it into a situation where the government is now picking winners and losers and the way the system is right now, the winners are the current income providers who are traditionally the hospitals. Couple other sections of this bill, are diagnostic centers, you'll see CT scanners, as an example on your procedure, we're the only state in the country that requires a positional physicist to have a diagnostic center CON, it was put in back in 1993, and the big issue with that is being able to have CT scanners. Right now we can make it under a $500, 000 but we have to buy all the equipment. We're asking you to make us like the other states and take this off of us. And then [xx] that was something that was not controversial that was brought up. And then last but not least, there's a provision about procedure rooms, and taking them out of what's called the needs assessment and I know I haven't given you a lot of background on how CON one is regulated. But basically there's a needs assessment that's determined for operating rooms and Back in 2012, the division decided that in settling a lawsuit that an incumbent CON Operating Room Holder could develop as many procedure rooms as they wanted identical to that one operating room, and so once you had an operating room you could do as many as you wanted, and those procedure rooms were no longer included, were never included before but would not be included, in the Needs Assessment for Operating Rooms. And so right now what you have is, if you have a CON for operating room you can basically open up as many as you want. And so basically this provision of the bill is saying it is not right, and if you're going to allow these procedure rooms to be developed then why in the heck are you going to have the State Medical Facilities Plan looking at the Needs Assessment for Operating Rooms because it doesn't matter a hell[sp?] of beans anyway. Thank you. And I'm all done. Thanks. Thank you, Miss Wilson. Cody Hand, if you would come up. Vice President and Deputy General Counsel for the North Carolina Hospital Association. Welcome.

Thank you, Representative Lambeth and committee. My name is Cody hand, I'm with the North Carolina Hospital Association. Thank you so much for allowing Miss Wilson and I both to get up here and state our sides. There's a lot that she says that's true. There's a lot that she says that I do disagree with a little bit, but let me talk about what we're doing in health care, and what we're doing under the current law with Certificate of Need. Miss Wilson is right, we're an industry that needs to change like every other industry in this state that has changed before us, and we're in the midst of doing that as we speak. One of the things that we're doing, especially in our rural hospitals but statewide with the over 130 hospitals that I represent, is we have what we're calling the Triple Aim. It is a transformation process that we're going through that will do three things at one time. It will improve the health of all of the people of our state, all of your constituents, it will improve their experiences on an individual level in every facility that they go into, and it will make sure that we're doing that at the most affordable cost that we can. One of the things that we need to do, and that is make sure that there is ambulatory circle[sp?] care as it's needed, and when and where it's needed. Some of the ways that we're doing that is for example, in a rural hospital in Anson county, they completely rebuilt that facility to make sure that the needs of that community were met, but were done so at the most affordable and economical level of care as possible, if you have not seen that facility I'd encourage all of you to go there. Some of our hospitals especially in our rural facilities, are embarking on on a process to become as efficient and lean as possible. The reason for that is because rural health care is changing every day, and we have to make sure that we're still delivering the right care at the right time, at the right place and for the right cost. Some of our hospitals are working on plain billing  so that all of our patients understand what they're owed, and we're looking at expanding that to a statewide level. And we've been doing all of this working with our physicians and with our provider community to make sure that we're here in 30 years when your constituents need us in the dead of night. Some of the things that we do that we're not paid for, and never will be paid for and nobody is competing to do with us, are providing disaster relief when we have hurricanes and snowstorms, or God forbid, another train wreck like we had. We do things like gas masks for Ebola crisis, we don't get paid for that stuff, and again, nobody is looking to do it with us. All of this involves an integration with the medical community that we are working very hard to do. We are looking at every silo that's been created over the past century in health care, and breaking down those silos as fast and as hard as we can. I would tell you that this bill goes the wrong way. It raises silos. It makes doctors and hospitals separate so that we don't communicate as much on patient care as we need to, and as we're doing now. One of our biggest concerns that I hear from my emergency room physicians is if we have ambulatory surgical centers that are operating outsides of the CON Law that some of those business will have their physicians drop call at the hospital or drop their privileges. When a physician drops privileges at a hospital, that means they're not available to take call when we have a trauma come into the emergency department, and think of a neurologist being needed after a massive head injury, think of a orthopaedist being needed to reattach a digit after your child has had it caught somewhere. Those are things that in the rural communities we face on a daily basis. We've got to have enough call in our EDs, and this bill will help to end that. Now, one of the things that we're often criticized for is we just don't want competition, we don't want to let the free market take over. If we had a free market in health care but for the CON Law I'd say get rid of it, but we don't. You eliminate this law, or you add these exceptions that House Bill 200 will add, and we will not be left with any more of a free market than we have today. In fact, for those of us who are still operating under CON in so many other areas, it will be more regulated than it is today. So I would remind you, I'm a free market guy, you've all heard me say this before. I'm as free market as they get, [xx] is my idol. This bill will not fix the competition issue. There are so many other things that we need to address, mainly from Washington that we have to have happen before we can talk about C. O. N. Another issue that I have with the bill and Miss Wilson's testimony is we can't separate urban and rural hospitals. We're a safety net system in the state of North Carolina, and so many of our rural hospitals depend on our urban hospitals for support, for access to networks of care and for

basic things like saving money on supplies and equipment. Allowing C. O. N changes to be made in urban areas only, or allowing them to be made in rural areas only with the hospitals consent, mean that our urban hospitals have to make a decision. Do they continue supporting the rural hospitals? or do they have to take their money and stay in the urban areas to do this so called competition. I'll submit to you that you canot make a decision about urban hospitals that doesn't hurt the rural hospitals, and vice versa. One of the things that we're worried about with this bill is the unknowns. I can't get up here and tell you that this bill will cause rural hospitals to close. I can't tell you that repealing C. O. N will cause rural hospitals to close. But I can't tell you that it won't. More than a third of our rural hospitals are operating in the red. Only a third of them are operating in the black and most of those have partnered with an urban hospital or with another hospital system, in order to figure out how to work in this new world. And so when I can't tell you for certain what's going to happen, I would ask you not to take that gamble. Because as I said before we're transforming, we're working with the state on Medicare reform, we're hoping that in the next five to ten years, we deliver to you health care for the next century for your constituents that will last and will be as world renowned as it is today now in five to ten years if we can get it right which I think we will, this could be a different conversation. I don't think it's the time to have this here on conversation because of all the unknowns now again it's not a firm law for us to comply with either and we've come to the General Assembly for years requesting changes to the administrative side of the law. I agree with Miss. Wilson. We need the County procedure rooms, we need to have an accurate picture with what happens in our procedure rooms about the state and I believe that that will address a lot of concerns of what I need. But in a time when our operating lines are 54% occupied and excuse me in patients that's the 54% occupied. In our operating rooms, and some metropolitan areas are closing a half day a week because of the demand or the lack thereof of demand, I think this is a conversation that we need to have not today but in a few years. So again I can't get up and be the [xx] and tell you your rural hospitals will close if you pass this bill, but I can't tell they won't. I can tell you it will hinder out ability either transform healthcare for the next century. Thank you. Thank you, Mr. Hand. OK, I'm sure there are number of questions. If you will direct your questions through the Chair, I will try to keep up with those and we'll, as both of you come back up, and I know Representative Bishop, you had a hand up earlier. [xx] I'll be glad to wait [xx] OK, since he's a vice-chair he gets rank anyway so, Representative Brisson. Thank you, Mr. Chair. Not very seldom[sp?] do I get priority, but I'll take it. I guess my question would be to Miss Wilson, and Miss Wilson you certainly, and I want to take time to thank the bill sponsors for exempting, and I think understood you, anybody under a hundred thousand population in any county would be exempted, is that not correct? That is correct, Sir. And I appreciate that the, but serving on the Health and Human services committee and working with Medicate for a lot of years, they [xx], Blue Cross Blue Shield and I know they like this [xx] appears to save him a lot of money and I can see where they're doing with it but these are not the only insured or the patient is [xx], almost touched on Medicate but, passed it pretty quick but, how does this affect Medicate patient because I'm still concerned and I can tell you, even though in this high populated areas, just to give in an example of Wake county over 20% right now. Of the children 17 and under are living on the poverty level. So everybody's, everything, right now everything is not booming. I know we don't look out at the wind and see it from the Capital but you see here, and from reports that I get, it's hard for a medicare patient now, to get an appointment within Wade County. A lot of them were moved to Dirham[sp?] is one of the closest points from here. And then you look at the Blue Cross carriers in this counties that exempt. Then we are doing all these great things and we're going to save all this money,

and insured you always going to pay 20% or a portion and that's a savings to everybody but what we are saying in that by exempting, and I'm not trying to turn nobody around exemption, but what we're saying if you're living these counties then you got to travel up here, to the highly populated areas to get those receipts. So that's not all bad, but we're already probably doing that to begin with. But I'm concerned how a medicate patient and self pay as if serving on the hospital board for 11 years in my county, and we had self paid and we had, how would this accept those patients, knowing good and well that Medicaid we can bill whatever we want to but the Federal Government says price it how much we're going to pay for a certain procedure, and that's all you're going to get and then [xx] in the rural counties, that's basically all we get. I'm getting up there so my memory is not that good. Can I go ahead and answer? That's a lot of territory to cover. Ms. Wilson. I know I've a lot to cover. Thank you Representative [xx] That is a great question and you bring up so many good points that we really need to address and House Bill 200 addresses those. First of all right now you have unlimited number of facilities that can do the charity care. What is in vision with estimated with this bill that you will end up between 80 and 100 additionals ASC's. And these ASC's are going to have a 7% charity requirement remember I told you, the average for the hospital A. S. T's is around 3.9% in 2013, so there's an increased opportunity for Medicate recipients because they're part of the charity care requirement, there has to be a plan, so what we envision is that there is going to be a lot more opportunity for this Medicate patients, and on the rule hospital Frank, you're exactly right, like [xx] county there was meant by coding. Right now almost 95% of their A. S. T patients are leaving that county and going to another county for service. It would be wonderful if house bill 200 were passed, well that local county could decide to have their own A. S. T, and they can keep the patients in their district, and I'll tell you how it works with dogs, because you have to have the facilities for the doctors to come I don't know how many of you guys are in rural counties, we're trying to give positions to come in and practice. With a law like this on the books, you give much more opportunities for doctors to go to rural areas for practice, and like I mentioned to you before, 24 states all ready do not require a [xx] for AST, so you are going to be very normal on what's going on. So those are great questions and I hope I answered Mr. Chairman that's my intent, Thank you Mrs Wilson. [xx], and Bishop Thank you Mr. Chairman you said that you favor competitions for general purposes but in this instance it does not seem to be appropriate or would not work or might not work, why not take an area and experiment with it and see what results we get, and if we get good savings and you have hospitals, and strong hospital systems in Urban Counties you go a period of time, let's see how the costs compare, let's see how the availability of service compares, why not do that and do it with a bill that does it in a limited fashion like this one? Thank you, Representative Bishop. Well, the good news is we have 24 other states that have done this before, so we have some data from what they've done. I can tell you in Texas, their inpatient hospital rate is about 11-15% higher. Now, that's an inpatient rate so you wonder, how does that have anything to do with ambulatory care? Well, one of the things is that paying patients who had care left the hospital and we were, not stick with, but the patient load that we were left with was a highly uncompensated Medicare and Medicaid population. So the studies have been done, not in North Carolina, but we were able to look at data from throughout the country from those other states that have done this, and most of those states though did de-regulate operating rooms fairly early after the CON Law changed. Some of them did it in the '90s, not many of them did it since the Affordable Care Act, and that goes back to my point. I don't think you can separate rural and urban when you're talking about even a pilot project, and Representative to your point we don't have people wanting to open

AOCs in rural counties, we don't, it's just not there. The business isn't there, it doesn't make good business sense and I don't believe they could get a lender to loan them the money on the building. So what does that mean for the Medicaid population? That means that they come to the hospital. That means that your Medicaid allowable costs will probably go up. Now I can't say for sure they will go up, but the cost of the Medicaid Program will probably rise, especially in those rural counties that have a high Medicaid population. So Representative Bishop to your point, its been tried, and I think it is a good idea whose time has not yet come. I think we've got a lot that we need to do in healthcare before we can have this conversation, and I think that this bill is very premature. Thank you. Follow up, Mr. Chairman. Follow up. I've seen some data out of Texas, and I don't know if you got yours at the same in place I got mine. My impression from looking at data more broadly, as the academics say, that Certificate of Need Laws particularly limit the availability give medical services, and they do a relatively inadequate job of containing cost. Now, I don't know the data you're referring to out of Texas, but I'm looking right here at something from the DOJ Antitrust Division and the Federal Trade Commission and they say, The agencies experience and expertise has taught us that Certificate of Need laws impede the efficient performance of healthcare markets. They create barriers to entry and expansion to the detriment of healthcare competition and consumers. Are they wrong? Is there reading of the data where people have tried deregulation, is it wrong? It's not wrong. I would add though that a lot has changed in healthcare, or a lot is changing in healthcare that we need to compensate for. I'm not advocating that CON contains costs. What I am saying is we're concerned about the access that our patients and your constituents would have, until we transform healthcare to a point where we can have a CON conversation. Thank you, Mr. Chairman. Thank you. Representative Dobson. Thank you, Mr. Chairman. More just a few comments if I may. OK First of all I would like to thank the bill sponsors and particularly Chairman Avellar for approaching it this way, anything of this magnitude needs to be done in a way for full discussion for debate, and I appreciate her diligence doing it this way and we worked closely on some other issues as well, so just want to say that. On this one however, I do have some concerns, a good friend of mine once said that this assums free markets in an area that it's not free market and a lot of the issues have already been debated, so I will not spend a lot of time rehearsing them, the 24 hour service and I don't think you can pick and chose, what's free marketing and what is not, and it's about hospitals and this other entities and I don't think you can pick and chose what's free market and what is not. Hospitals are obviously 24 hours service, and that is always going to be the case that is not free market, mandated coverage where this other entities may be 7%, hospitals are 100%, if that's who comes through the door. So that's another concern as well with the charity care. So I'm not telling you anything you don't know. Everyone knows the issue, everyone knows the debate. But I'm concerned about real hospitals and every county. Just last month, they decided to close down their delivery floor. So, when one of my counties are no longer delivering babies and not suggesting and CON having thing to do with it. My point on saying that is, we're on the margins in these rural areas, and that is it's my concern, and I'll just leave you with this. This is from Avery County, Chamber of Commerce position statement on health care legislation. Probably I think it's the fourth most conservative County in the State, if not hire. And pro-business Chamber of Commerce in Avery County. And this is what they say with regard to health care, resolve that the Chamber supports the current executive need law as it protects all the providers ability to remain in the community at the lowest cost possible, that's kind of where I'm at with it believe is genuine with the real hospital concerns I know their is provisions in here that try to protect that and I appreciate that however I don't think you can associating mire because of the affiliations with the hospitals. So, I think that there in the same boat as far as that go, so Mr. Chairman I will leave it there, the next lets [xx]. Thank you representative Dolson, Mr. Willison want to make a comment,

follower Representative Dobson, I can tell you love your district and care about your folks, and it is very hard in rural North Carolina not only with the delivery of the health care systems but the jobs aren't there anymore, so there's a lot of change that has occurred in rural North Carolina. And doing our work on certificate needs we were looking at Georgia because they are very similar to us in many ways, and they have modified their seal in laws in house bill 200 is the beginning in that process but they have modified their seal in laws to give flexibility to those rural areas, where maybe a hospital can't stay open because there's a point where the business isn't there, the revenues are coming in because of whatever is going on within the community. Right now there is such an inflexible [xx] environment that it actually makes it difficult for rural hospitals [xx] leave the way they need to. I know in eastern North Carolina there was emergency room that was set up, it took a lot of a lot of paper work to go along with that and you can see here this is one seal in application just the initial request that doesn't contain the law suit, so what we're talking about here is we've got rural North Carolina and then we've got urban North Carolina, I know for those of you, I used to represent [xx] I can tell you Medical Center is making hundreds of millions of dollars in net income a year. You've got these dichonomies that are going on here in North Carolina where the large hospitals are doing extremely well and doing better. And then you have rural hospitals, and then you have the poor patients who are stuck in the middle, paying way too much for healthcare, when you have the affordable care act that's come in. Where many times people are paying a 20% co-pay on a very expensive procedure that could be done at a 1/3 or 1/2 of the cost. So I understand where you're coming from. What we probably need to look at is [xx] but how can we change the regulatory environment so that counties like Avery County and other small counties can [xx] and deliver the services that they need to make sure they have healthcare available for their citizens. Thank you Miss Wilson. Representative Zouker[sp?] I know you had a question. Thank you Mr. Chair. I've actually got two questions/comments, so I'll just throw them out there and if you can answer them, great. The first one is on this one piece of paper that talks about at the percentage of self pay charity, made different by facility, I would state it does differ by facility and it differs whatever AFC you ask, because I've asked that question numerous times and there's no standard definition. So the problem that leads to 7 other PCS are using a 7% from self pay, which self pay is undefined and no we're putting a standard onto self pay, which depending on which way you want to make with the numbers or move the numbers, you can make the numbers say whatever you want to. so in my view point, for this bill to progress, we would need a rock solid definition of self pay in section 7 conserving that paragraph 1 right there about the commitment for self pay and I would like to see that same example once we have a number again section seven, it says pretty sure operational commitment to report to the department Okay, we make a commitment to report to the department, and what if the commitment on ESC makes isn't met, now they close down or we just, I mean there seems to be no enforcement mechanism there and I'm concerned that, and the last comment I would have is on sub paragraph four the operation stop like in a county with a population of less than 100000, I understand the sense of what the bill sponsors are trying to do, but let's take Cambarin county as an example. We have two hospitals, one's on post and it doesn't take civilians medical centre, we have capevilla medical centre which also provides a coverage for breitton county that's it, we have one hospital, we have 330000-340000 folks so I have talked to the staff at length about this in the financial approximate of cambarin county in the hospital and it would have a significant negative impact their ability to continue operations to serve the population that walks through the ER doors 24/7 those are my concerns. Thank you Representative Socah but are you going all to respond? Ms. Wilson, thank you very much, if you look at the Blue push your costs to major for, and this is for prizes okay. And representative Lukas is here.

You can see cater fee is not on there. which I was disappointed in because my doctor in Faver tell me its one of the most expensive hospitals in the state and I kept going back cause I don't know where it is found on the estimators so that is something if you want to get up with blue cost the shield, I think you are missing a very important picture here. Its what your citizens are paying for care. In campgarin county, in talking about the enforcement of the seven percent charity care that is language that is very similar that the department and is already using for three demonstration projects. We have a doctor here who his practice has one of these demonstration projects and he can talk about how it's enforced basically what happens is if you don't do the 7% you lose your license, which is a very stiff penalty. Last, but not least, and I've been wanting to say this to folk for a long time, so this is a real blessing. I appreciate it. But we talk all the time about having enough money coming in, but these hospitals are also businesses, even though they don't want you to look at them as businesses. They want you to look at them as non-profits that are just there doing the good for the society, and I'm not saying they don't do good for the society, but they don't want you to let you think that they're a business. They want to hammer you guys for Medicaid expansion. They want to get more money for different things, but what they don't want to tell you is what they're spending money on, and that's the other side to this story because many of these hospitals, particularly the larger ones but even some of the smaller ones, are going up and buying doctor practices all over the place, which is not cheap. And when a doctor practice is purchased, the same patient who was there the week before the doctor practice was purchased is now paying more for the exact same healthcare service. So it's two sides of the coin, and part of beginning the process in House Bill 200 is an incremental approach to change in CON. This change needs to happen for the consumers, and it's important for healthcare delivery in North Carolina to realize that we're now in a different century, and we need to move forwards with bundled[sp?] payments and be able to have our consumers have the best healthcare possible accessible at the best cost. Thank you, Representative Waddell. Thank you, Mr. Chair, and I appreciate your passion Miss Wilson. I only had a couple of questions really, and both of them had to do with basically what Representative Brisson was talking about, and I think Representative Szoka veered[sp?] on a couple of them. One if them is the 100, 000-person threshhold, which I stay in Columbus County, and Columbus County is close to Robeson County, and Robeson County is not going to meet that threshold. So my concern is, one concern will be if I'm Columbus County for example, you set up these ASC centers in Robeson County, and people basically sits as close enough they would be in Robeson County instead of being Columbus County or Blaine County, so how is that going to affect the rule hospital that am in or have there in Columbus Canada, that's one question and I'll let you answer that one. Okay thanks, and that's a great, Thank you Mr. Chairman, sorry. In Columbus County you have a 50% out migration going on and if you look at your blue [xx] shield. Sorry, I don't need this glasess I went 50 miles out because the markets are ready changing what's going on with where people are getting health care. The insurance care you're just saying medicare saying, "I'm not willing to pay this higher price, you are going to have to travel. " And you may have recognized this all ready, people are going to Wilmington from your area, have you noticed that? in your [xx] for an ACL it's $8000 on women and childcare and let's see, [xx] it's $24000, so the markets are ready pushing us to this point. And what happened here is you may be able to open an ASC there, there might be one in the Robertson County, it free up the system, to be able to deliver those services, I don't know if that answered your question. Go ahead. The other question I was going to ask has to with the charity cases. You're telling me 7% charity cases, which I assume are no bias, Is that correct? Well, it's not just non payers we do not count bad debt as charity care, it would be people that were qualified, we have a position here, I don't know if you want to say anything. Let's let the committee got through the questions. Okay, good. There's definition already, there's three ALC system project out there that the has overseen that it have 7% credit record requirement will reduce that same language in process.

I understand. Follow Follow up with. To getting back to the charity cases Vs Medicare and Medicaid Pay. In Columbus County, most of the pay comes from Medicare and Medicaid. My hospitals are telling me 60 to 70% of their pay. That's not necessarily like Representative Bristen and Representative Jacob pointed out is not charity care but it is an exact payment that normally would not be the kind of payment that you would want to receive from those services so if you move this chase carols and move this hammertoes surgical senators outside the county then you are going to be moving money in my opinion away from those counties into it rubison all in white county in micro bag county, I guess if we get sails tags change where we can get a share of it back in the roll edge, not big but that really not comment on. Well, first of all the comment on charity care, there is no requirement or definition for charity care reporting currently, except for this demonstration projects. So it's the physisional[sp?] facilities that are curled currently we're having to meet this requirement. And so we're keeping that requirement in place, so what we're saying is the most that you can get qualification for what the value of that charity care is, is what Medicare id willing to pay. If Medicaid paid less than Medicare, then we get that kind of benefit there. If we have a charity case where there is no payment we give the benefit up to Medicare. With hospitals, it's very different, they are not required to use a certain definition of what their charity care is I've had it called a rufrum[sp?] rate. But whatever rate that they want to use to say that's the value of that surgery, then that's what they're allowed to use. We're limited to Medicare, and that brings a truth and disclosure about charity care. Thank you Miss [xx] So I would take a little bit of a disagreement with that characterisartion The IRS defines what we can say is charity care. We have charity care, we have uncompensated care, we have bad debt. We're telling you all of those We're not required to take 7%. It's Representative Dobson's point, we're required to take who walks in the door. And for some of our rural hospitals hospitals that's 20% for some of them it's 10%, for some of our urban hospitals it's high. Now we can't look at just what we are doing in our operating rooms and we cant look at who is required to do what and who is representing and where they are required to do it, what we have to look at as hospitals and as rural hospitals is delivering the right care to the patients when and where they need it, and where they are required to do it the question you need to ask yourself when you're considering this bill is, do you want an emergency room in your county, how far away are you willing to drive when you need an emergency not when you have a cold and you cant get to the doctor, when you need urgent care, how far are going to for that? So ask yourself all these questions when you're at who is required to do what and how much they're doing, what they used the money to pay for, Representative Dola Thank you Mr. Chairman, I had some comments but I know there's going to be another meeting, so I'll save those and just go to question and that is just asking, if either of both of the presenters are or where and if they have a comment about the GAO report that came out in the fall of 2012 that was dealing with imaging. The fact that they studied imaging with the surgery centres and those without and they found their report stated that in 2010, there were 400, 000 more referrals for advanced imaging services costing Medicare in this case, around $109 million over groups that were non self referral. I do think that the question is out there, and I know that some of the other areas get discussed and this may be getting too much in the weeks for the hour, but there is a legitimate question here to say if you have more procedure more surgery rooms. It seems logical, particularly given the types of procedures we're talking

about doesn't necessarily apply to all procedures in all scenarios. But it does seem to me that it's logical and the always seems to have some evidence in this regard, that you would have more procedures. While you could have procedures that would clearly be lower costs. If you have more of them, then you have to factor that in as well when you look at what was the overall savings this case to the tax payer's be and I always just remind people that if you got a 100 people in this room you've got a 100 consumers of health care. But the fact of the matter is, you only have maybe four or so, depending on how you look at it, there may be four or so actual customers in this room. In terms of who is actually paying, and am talking beyond the [xx], but I'm talking about the bulk of what's that's actually put in so if you want to respond to that and Miss. Winston Thank you very much Mr. Chairman. I was just looking at that report this morning and was shocked when I read it because the report, to give you a little back ground so you understand what it's talking about it's a GEO report from 2012 that looked at [xx] and CT scans, and utilization when a doctor could self refer, so what the study said when these doctors could self refer was they did 25%, 30%, 40% more, but what the study didn't show is what the number of hospital procedures that was being performed for MR Is and C. T scans, because what was actually happening is there was a reduction to the hospital return the highest cost rates, remember I have got that CTs scan cost in there so you can see what people are paying in general in your area. But people are coming are coming out of the hospitals and into the less expensive physician office, we have a perfect example in North Carolina where this has occurred and that's with [xx] back in 2005 the General Assembly approved a law that allowed Gaston Neurologist to have their own endoscopy rooms in their offices and I don't know how many of you had it before in the hospital and after wads in the doctor's office but the doctor's office is heck of a lot more fun. For some that ain't that much fun. So anyway what we discovered and these are a little it older numbers, but going back to our Councillor Committee Dave French did some research on it and yes what we found out Representative Dollar, was that utilization went up to 28% because people were willing to go have the procedure done. But the cost saving were so substantial that over a six year period just for calling afkarbiz, $244 million were saved, so you can't look at this thing as just as one little area, you got to look at the big picture and what you are doing is allowing the delivery of health care to change so that people can have access and affordable prices. How about representative Dola. Well that not to delay with the point because time but I would observe that the gastroenterology in the colonoscopy is different from some of the other services in terms of how you end up there, as very few people end up there because they have any interest in showing up there. You have to be pretty much forced by your primary care doctor to eventually be there and it is a different, I just put like this, I think everybody realizes that's different scenario from some other services. We have two more who would like to ask questions see if we can get the same for adjourn and Representative Goodman. Thank you Mr. Chair. Ms Wilson has a charity care works, is a digression to you picking kids who you want to provide charity care to, or do you take who ever shows up. In my hospital in Richmond County they had an undocumented immigrant, come through the door of the emergency room, had some kind of procedure, I'm a little vague on what happened bottom line is, it is like 78 days later, he is still in the hospital, they tried to have him deported, couldn't get that done and he's just in there running up the field there's nothing they can do, they have to keep in there and I'm sure you want to the morally right thing but what happens when you hit that 70% threshold. Do you reject the next person that walks through the door or do you choose

as someone comes and you say this is going to be a messy situation? Do we turn this person away and takes some charity care that going to be less problematic? Just how do you approach those issues? I keep looking back at after answer from physician one of the thing he said that impressed me the most about the doctors that I work with is the seriousness that they take they because of that same hospital, that you have a doctor who actually performing the medical services for that patient and I hear over and over again from them, that yes, it's going to save money, yes it's it will allow us to have anatomy, but it's always patient first and I get that consistently across the State. What is being requested by the department with this demonstration projects is that they have a plan and that's 7%. I know that for the [xx], orthopedic demonstration project I have seen numbers for 2 year. The first year I think they managed at 7%, the second year they did 9% charity care which is very substantial, now how they choose the individual patient I can't tell but his doctors have a heart and they are already working with these patients and they want to continue to do that. Last question Chairman Bram Thank you Mr. Chairman. Not so much of a question, more of a comment I appreciate the opportunity, members I would urge you to take this estimated from blue cost was shield with an absolute grain of salt, I will give a [xx] instance if you will, there are three facilities listed right here the top they are all the exact same facility with three different price structures for the exact same facility, so I will certainly take this down with a very big grade absorbed. From an overall perspective of my concern regarding changing ICO and structure as it stands, there's two major concerns that I have. The first one is for the real person of our state, and I understand that the hundred thousand women could preclude this hospital should take this blue areas from taking place. The reality is, if you look at Eastern North Carolina the majority our rural owned hospitals, service hospitals to own by one medical facility and that's vital, and they're struggling to keep those facilities open and to keep those facility servicing patient, we start to cut away their ability to be solvent in their main medical facility which is though place that actually subsidizes these rural facilities, there could be potential issues in those rule markets. The other is not so in a [xx] but actual experience driven actually worked with [xx] center in Texas, and it was a center that was actually owned by forth position practice and a window operator who managed the facility itself. 80% of our patients have walked through our doors for self refer from those [xx] patients, positions earned practices. I can remeber they were setting in media meetings with those four positional practices and the operational team talking about helping out referrals, referrals being down with very little interest of expanding beyond the 1.9 million residents that lived in the regional impact area this one operation. So we have to be very careful in the method in which we move this forward and I urged the members of this committee to truly look into the data and fully understand it before moving this Bill Thank you. We are a few minutes past, I do want to thank both of you for being here for your willingness to not only presentation but answering questions. I appreciate the good job you both did and taking your turf and your perspective on this issues, so thank you very much, meeting adjourned