Aaron Rice on the 45-Year Rule That Blocked New Home Health Care in Mississippi

Aaron Rice (0:01)

The whole Medicare reimbursement system that was in place back in 1979 doesn't even exist anymore, so the whole rationale of kinds has kind of gone away. But specifically within Home Health, the entire idea behind certificates of need was that it was mainly hospitals and things that were very expensive to procure, like CAT scanners and other things like that.

Things that a provider might spend a lot of money on, particularly facilities like a hospital. And so the idea there was to help drive those massive costs down by basically making providers, healthcare providers prove that there was a need for this expensive equipment or this huge facility that they wanted to build or this expansion new wing of their hospital they wanted to build. And so in the Home Health context, that makes absolutely no sense.

SPEAKER_2 (1:00)

Americans are capable of achieving extraordinary things when they have the freedom and opportunity to do so. This is American Potential.

David From (1:10)

Hey everyone, welcome to the American Potential podcast. I'm your host, David From. You may remember COVID forced everyone to change how we live.

And it also changed how we worked and received healthcare. For seniors, it was particularly important because missing doctors visits and treatments had real consequences. So because of these issues, a physical therapist named Butch in Mississippi wanted to make care more accessible through an in-home service. But state rules created obstacles. Today, we're going to talk to his attorney about the fight he took on to make a change. I want to welcome attorney Aaron Rice with American Dream Legal to share Butch's story and the lawsuit that they brought against the state.

Aaron, welcome.

Aaron Rice (1:54)

Yeah, thanks for having me, David, glad to be here.

David From (1:57)

Thanks. Hey, so before we get into that case, let's talk about going, let's go all the way back to 1982 and talk about what the state did then and how that relates to this case.

Aaron Rice (2:10)

Yeah, it's really interesting because, you know, as you probably know, I'm sure you do, many states all the way back in 1979 adopted what's known as a certificate of need law. And Mississippi was one of those states. This was kind of pushed down by the federal government and a misguided law really that basically set up a system in which if you were wanted to start a home or any health care business or expand that business or even buy equipment for that business, you needed to get what was known as a certificate of need. And this, you know, importantly, was not a certificate that looked at your qualifications for the job or how, you know, clean your facility was or anything like that. It only was supposed to look at whether your services were needed in the community.

And the real, you know, just a trick there was that the people that got to help determine whether there was a need in your community were your future competitors. They got to weigh in very heavily and often those government boards, you know, would rely on their advice on that. And so obviously, you know, we'll talk about it, I'm sure, a lot later. There's a lot of problems with that system. But what makes the situation in Mississippi unique as it relates to home health care is that we adopted, our state adopted that law, a con law, certificate of need law. It applied to home health like many other, like most other medical services. But then our Board of Health in 1981, so this is, you know, two years after the certificate of need law was adopted, they decided to, they were trying to, home health at the time was kind of a new industry. And so they were trying to come up with, you know, just how they would evaluate the need for home health. And it was taking them some time to do that. And so they decided to put a six month moratorium on the issuance of any certificates of need. So essentially the people that were already in the market had already been granted a certificate. But the board put a stop to that and said, we're not going to issue any more certificates of need for home health for six months while we evaluate this. And as you may have already guessed, a lot of times when you give industry competitors a shield from competition, it's very, very difficult to take that away. And so that's exactly what happened here in Mississippi, is that the established home health providers immediately started pushing to keep that moratorium on the books. And they were successful in doing that. And it ultimately stayed on the books for 45 years. It was illegal for anyone to open a new home health facility in the state of Mississippi. Our client, Butch, ran into that problem, of course. And that was one of the things that led to his lawsuit. And ultimately, thankfully, we actually got that overturned. So the trial court ruled that that moratorium was unconstitutional. We were also challenging the overall certificate of need law as well. So getting the moratorium struck down means that now he can apply for a certificate of need.