Iowa legislators relaxed the state's certificate-of-need law, and, although the revisions don't take effect until July 1, the changes already are pitting hospitals against physicians on some capital projects.
The revised law allows hospital replacement projects to go forward without state review, as long as they don't expand existing bed capacity or add new services, said Barb Nervig, program manager of Iowa's CON program.
The changes also raised the CON threshold for review of capital investments to $1.5 million from $800,000 and the threshold for new services to $500,000 from $300,000.
About half the 90 projects the state's CON committee reviewed in the past three years would be exempt under the new law, she said.
The changes mean a controversial $75.6 million replacement of Burlington (Iowa) Medical Center will begin construction later this summer without state scrutiny.
The project is controversial because the new hospital would be located two miles from its current site in the city center. But a hospital spokesman said remodeling the existing facility would cost $91 million.
The new 112-bed hospital, down from its current licensure of 213 beds, is expected to begin operation in early 2000, the spokesman said.
But a $3.6 million outpatient surgery center in Burlington proposed by 19 area physicians still must get the state's go-ahead. Its CON hearing is set for June 12.
Hospital officials plan to protest its construction, arguing that the surgery center would duplicate hospital services and hurt its finances.
The doctors will argue that their facility will provide needed competition to the hospital, said Scott Becker, a Chicago attorney representing the physicians.
The new CON law still requires the review of certain high-tech investments, regardless of cost. Those include cardiac catheterization services, open-heart surgery and organ transplantation.