Maryland Lawmakers Want To Strengthen Regulations That Make Health Care More Expensive
A new bill could make Maryland "the most restrictive environment in the country," warns one doctor.
A bill is advancing in the Maryland General Assembly that, if passed, could make health care more expensive for the state's residents.
In February, state Rep. Bonnie Cullison (D–Aspen Hill) introduced House Bill (H.B.) 944. This bill, along with its Senate companion, would strengthen Maryland's certificate of need (CON) laws, which require health care providers to receive government approval before expanding or building health care facilities.
Like other federal efforts, this bill looks to crack down on consolidation in the health care sector. Specifically, H.B. 944 directs health providers to provide 90-day advance notice to the Maryland Health Care Commission (MHCC) before any "material change transactions," including mergers and acquisitions of most health care facilities and some real estate transactions. After receiving notice, the commission could either approve the transaction or launch a lengthy "public interest review" that could ultimately end in denial.
Since they were first introduced in the 1970s, CON laws have given state governments broad authority to regulate the health care industry, often making it worse and more expensive.
North Carolina's CON laws set off a yearslong legal battle between WakeMed Health and Hospitals and Duke University Hospital. In September 2023, state regulators gave a CON to WakeMed for a linear particle accelerator (LINAC) for cancer treatment in Wake County. Duke University, which already had four other LINACs (and approval for a fifth), challenged the decision, and in February 2025, an administrative judge overturned WakeMed's CON. WakeMed immediately appealed to the Court of Appeals, alleging that Duke Health had engaged in anticompetitive actions, reports the Carolina Journal. However, in January, both parties asked for the case to be dismissed, "saying they had reached an agreement in undisclosed settlement discussions," according to North Carolina Health News. It's unclear if WakeMed will be allowed to add the LINAC since its CON was struck down last year.
CON laws don't only stymie life-saving care like LINAC, they also prohibit online vision tests, less invasive colonoscopies, mental health facilities, addiction treatment centers, Neonatal Intensive Care Units, specialized brain injury rehabilitation, freestanding birth centers, new MRI machines, and other medical imaging services.
In Maryland, which the Cicero Institute labels as having some of the most stringent CON rules in the nation, these laws delayed the opening of a hospital after regulators determined it to be too big and expensive. These laws also inhibit the size of ambulatory surgical centers in the state—facilities with three or more operating rooms are subject to Maryland's CON regulations. Because of this, most centers only have two operating rooms.
Despite this, Maryland lawmakers are intent on strengthening the state's CON laws, but doing so will not be easy. The bill faces staunch opposition from several stakeholders, including the Maryland State Medical Society (MedChi). Although MedChi doesn't oppose all CON laws, Gene Ransom, the group's CEO, warns that this bill could add unnecessary costs to health care facilities in Maryland. "We need to be careful when we're adding a new layer of regulation that could raise the cost of health care," he tells Reason.
By trying to prevent consolidation, which regulations like CON laws incentivize, policymakers are protecting incumbent providers from potential health care disrupters that could offer cheaper services. "Certificates of need…will [generally] favor the more complex, sophisticated institutions like hospitals and insurance companies who are more able to negotiate the complexity of the state regulatory approvals than independent practices," says Benjamin Lowentritt, a Maryland urologist whose practice has worked with private equity firms in the past. He adds that "private investors considering investment in the health care space are more likely to look elsewhere if the regulatory burden is high."
The Maryland Chamber of Commerce is also opposed to the legislation and filed a letter against the bill before a recent hearing of the Health Committee. In it, the Chamber warns that it "would create a new and expansive regulatory review process that extends beyond private equity activity and could apply broadly to a wide range of business transactions."
Adding "an additional layer of oversight" to "an already complex regulatory environment" could increase costs for health care providers and delay services. Lowentritt warns that "Putting everyone through this opaque process would only discourage innovation." It's unclear if the bill will reach Democratic Gov. Wes Moore's desk, but if it does, it would restrict the health care market in Maryland, which would likely raise costs for consumers. Lowentritt says that if the bill passes, Maryland "would be the most restrictive environment in the country."