ATLANTA – A controversial plan to loosen state control over medical facilities is being resuscitated, creating fresh worries for fragile rural hospitals.

The measure targets Georgia’s rigid process for approving new healthcare services, which critics say protects existing providers while limiting patient options for more affordable service.

“It’s the state, frankly, granting licenses as a form of franchises to selected medical providers,” said Rep. Wendell Willard, R-Sandy Springs, in an interview this week.

Willard said it’s too soon to say what will be in his bill when he files it next month, but it likely will resemble a measure he filed last session to repeal of what is known as the “certificate of need” program.

The Atlanta-area lawmaker said he’s been working ahead of the session to try to address objections.

Opponents say abolishing the current system will allow for-profit groups to siphon off the few services that provide revenue for nonprofit hospitals, which would be left to treat a community’s sickest and poorest residents.

It’s a particularly troubling prospect, said Jimmy Lewis, CEO of HomeTown Health, which represents dozens of rural hospitals.

The current system protects two sources of revenue – from surgeries and imaging – that offset a rise in uninsured patients and cuts in government funding.

Lewis said about 20 rural hospitals would be vulnerable if an ambulatory surgery center, which performs outpatient procedures, popped up in their community.

Those hospitals would likely “close in very short order,” he said.

Likewise, a Georgia Hospital Association spokesman said the group, which also represents rural hospitals, would “strongly oppose any efforts to weaken” the program.

Willard said he is sensitive to the rural hospital plight, although he is skeptical about the actual threat.

“If the hospitals are barely surviving, I doubt (the surgery centers) will be able to justify the cost of opening one,” he said. “But that’s one of the things we’ll look at.”

Willard said, for example, protections might need to be preserved for rural hospitals.

He’s unlikely to gain support from rural legislators without such a provision.

“I’m not ready to say anybody can come build anything they want, anytime they want,” said Rep. Darlene Taylor, R-Thomasville, a member of the House Governmental Affairs Committee, where Willard’s earlier bill landed.

An outpatient surgery center, such as one specializing in plastic surgery, may focus only on what Taylor described as the “easy surgeries.” Rural hospitals, on the other hand, have to be prepared for everything.

“I still think there needs to be some control in” the process, Taylor said.

There may, however, be some appetite among lawmakers to allow more flexibility to multi-specialty clinics, said Rep. Jason Shaw, R-Lakeland, chairman of the rural caucus.

“I think we have to be open to doing what we can to help lower healthcare costs,” he said.

Successful challenges to the certificate of need program, which has been around nearly four decades, are rare.

Healthcare providers including hospitals and nursing homes go through the process, which was created to prevent a glut of services.

Most states have such a mechanism in place, although about a dozen have scrapped their programs.

Willard called the system archaic, pointing to arbitrary rules such as one that considers equipment cost to determine whether a provider needs a certificate of need.

The process can represent a major cost that is passed on to consumers but could be avoided if lawmakers allow the market to be the judge, he said.

Willard has tried to broach the subject previously without success.

He tried last year to remove a limit on the Cancer Treatment Centers of America requiring 65 percent of its patients to come from outside of Georgia. The facility was envisioned as a destination treatment center.

Willard has described that limit, which was part of a deal the company struck with lawmakers in 2008, as “absolutely ridiculous.”

A provision addressing that may also find its way into the bill, he said, adding that interest in opening up the state’s regulations is “much broader” than the focus placed on the Newnan cancer center.

“I think more and more people are becoming aware of this system that doesn’t really bring about any better service delivery in medical services to patients,” he said. “So why we want to continue it, I don’t know.”

His proposal from last session kept a requirement for healthcare centers to commit to providing some services for the poor. It also would have licensed freestanding emergency departments and barred new specialty hospitals, such as a cardiac facility.

Even without a specific bill, discussions on Willard’s proposal have already started. A hearing was called late last month.

Jill Nolin covers the Georgia Statehouse for CNHI’s newspapers and websites. Reach her at jnolin@cnhi.com.