Mississippi Gov. Tate Reeves signed a bill Monday that temporarily relaxes state approval requirements for rural hospitals. The law aims to help struggling facilities expand services and generate more revenue by easing certificate of need laws.
The new law establishes a pilot program benefiting about 55 rural hospitals in Mississippi. It loosens restrictions on adding new services and making costly upgrades, which previously required demonstrating need to avoid service duplication. The law, already in effect, will continue through June 2027.
Under the program, hospitals in small communities can open one new facility within five miles of their main campus or make upgrades exceeding specified thresholds. Facilities in the Mississippi Delta can have two exemptions. Additionally, hospitals will now be allowed to open geriatric psychiatric units without prior approval.
The law could also help Mississippi access increased federal funding through the Rural Health Transformation Program. Nearly half of the program’s $50 billion in funding is allocated based on rurality, application quality, and alignment with policies including certificate of need reform, according to sources.
Legislators have been debating reforms to the certificate of need law this session, with some expressing cautious support. Senate Public Health and Welfare Chairman Hob Bryan said March 5 that a pilot program could reveal whether loosening restrictions benefits rural hospitals. Critics argue the laws hinder competition and inflate costs, while supporters say they help ensure community access to essential services.
In addition to the pilot, Reeves signed a bill Feb. 4 that makes it easier for health facilities to make costly improvements and limits the University of Mississippi Medical Center’s ability to open new locations without state approval. The reforms come amid concerns that more than half of Mississippi’s rural hospitals are at risk of closure due to restrictive regulations.
Some counties, including Humphreys and Issaquena, are exempt from certificate of need requirements entirely. The law also grants the state health officer authority to license eight dialysis facilities across Mississippi. An appeal provision requiring losing parties to pay legal fees if a challenge fails is intended to speed up approval processes and reduce delays caused by legal disputes.
