Is Wyoming a Certificate of Need State or not?

by Evan Blauser

In 1963, New York became the first state to implement a new policy mandating that healthcare facilities (including nursing homes) comply with numerous state requirements in order to expand their facilities or construct a new building. The basic tenant behind the policy was that if the government is able to limit the expansion of healthcare facilities, then they could curb overbuilding and redundancy, and ultimately save consumers money in the long run.

Unfortunately, the real-world implications of certificate of need (CON) policies are that the best healthcare facilities are stifled while subpar operations are artificially supported by the state governments. In Wyoming's case, we are not officially recognized as a CON state. However, several healthcare facilities are currently experiencing what it is like to operate in a CON state.

Specifically, if you own and operate a nursing home in Wyoming, then you are subject to Wyoming Statute 35-2-906 (b), which states, "Nursing care facility beds shall not be expanded or constructed if the average of all the nursing care bed occupancy… in the construction area is eighty-five percent or less based upon the annual occupancy report." In plain English, this means that you would need to rely on an extremely high occupancy rate among your competitors before you can expand your facility.

Ask yourself if this is the best policy for providing adequate medical care for Wyoming's senior population. Never mind the fact that the average nursing home occupancy rate for Wyoming has hovered right around the 80% mark, the principle of this issue is that it encourages mediocre nursing homes to remain the same instead of innovating to remain competitive.

CON Law Consequences

Pro Publica, a healthcare watch-dog group, found that 5 of the 38 evaluated nursing homes in Wyoming had a designation of "special focus facility candidates", meaning that they have been flagged by the government for having a history of serious quality issues. An additional nursing home, the Cheyenne Health Care Center, has such a serious history of problems that the Centers for Medicare and Medicaid Services (CMS) deemed it as a Special Focus Facility (SFF). Such a designation means that the Cheyenne Health Care Center is subject to, "more frequent inspections, escalating penalties, and potential termination from Medicare and Medicaid." (emphasis added).

Imagine if Wyoming allowed competition amongst nursing homes. This would give current residents of the lowest rated homes the option to stay in a higher quality facility, such as the Life Care Center of Cheyenne. At the moment the most significant barrier of entry into building or expanding a nursing home remains Wyoming Statute 35-2-906 (the 85% rule). However, several notable Wyoming politicians are fighting to give business owners the opportunity to – get this – expand their business.

Senator Bo Biteman of Sheridan, Wyoming, introduced Senate File 135, which died in Committee before it could be considered in front of the whole chamber. The bill, one page in total, sought to eliminate Wyoming's 85% bed occupancy policy to allow for the expansion and construction of new nursing homes. Detractors of the bill would have you believe the counterintuitive argument that limiting competition amongst providers would somehow benefit the consumer in the long run. Instead, Wyoming's nursing home policy has allowed subpar homes to flourish, while stifling the superior competition.

Finally, there is the issue with our state's designation regarding CON laws. Wyoming was among the first states to repeal CON law following the lifting of a national CON mandate from the federal government in 1986. Along with California, Colorado, Idaho, Kansas, Minnesota, New Mexico, South Dakota, Texas, Utah, and Wisconsin, Wyoming chose not to have official CON laws implemented in the state. If that is the case, then why would we continue to operate as if we still had those laws on the books? By limiting the possibility of expansion and justifying it using an argument of need (only allowing expansion if 85% of beds are occupied), are we not operating in the same way a CON state would? It is time that Wyoming stands behind its designation as a non-CON law state, so we can allow our healthcare professionals to provide the absolute best possible care to our seniors.

If you agree about providing the best possible care for seniors, please reach out to the Wyoming Liberty Group, or follow us on social media!