Board-Certified In Construction Law By The Florida Bar

Will state lawmakers change the rules of hospital construction?

On Behalf of | Jun 12, 2015 | Construction Law

As we’ve discussed before, breaking ground on a new building project is far from a simple process for developers. Indeed, the land on which the structure is to be built must be secured, the proper bids submitted, the proper permits secured and a host of other complex legal issues must be addressed before even the first shovelful of dirt can be moved.

Indeed, this process can be even more complex for those developers looking to build certain types of structures. By way of illustration, consider hospitals, which have long had to secure a certain type of approval from state officials. 

What kind of approval do prospective hospital builders have to secure?

Florida law has long dictated that those looking to build hospitals must first secure what is known as a certificate of need, which essentially documents that there is a demonstrated need for the proposed hospital in the given area and that state officials approve the project.

However, recent legislative developments suggest this may not be the case for much longer.

Is the legislature going to do away with certificates of need for hospital construction?  

The House Health Innovation Subcommittee has advanced a proposal calling for the elimination of certificates of need and the matter is currently before the Senate, which could vote on it as soon as next week.

If it passes, the bill will most likely not be vetoed by Governor Rick Scott, who has already expressed support for the measure.

Why take this step?

Proponents of eliminating certificates of need for hospital construction argue that this step will provide the construction industry with more opportunities and, therefore, more jobs, revenue, etc.

Perhaps more significantly, they argue that lifting this restriction will result in greater competition, which, in turn, will serve to drive health care costs down.

How do developers and construction companies feel about this deregulation?

Industry experts indicate that while both developers and construction companies would welcome the deregulation, they remain uncertain as to whether the demand for new hospitals will actually be there given that the state has not expanded Medicaid.

Specifically, they worry that so long as hospital networks remain uncertain as to how they will be compensated for treating uninsured patients, the more hesitant they will be to undertake new — and costly — building projects.

Stay tuned for updates on this important story …