Mississippi Gov. Tate Reeves would say he had good reason to veto all eight pieces of legislation that he blocked this year from becoming law.
We certainly agree with his reasoning on at least one of these vetoes, which nixed the Legislature’s effort to update the state’s certificate of need laws.
The Republican governor, who philosophically is no fan of the CON laws because they limit competition among health-care providers, says he would have signed the legislation except for one amendment that was added by the Senate during the final days of the 2025 session.
That amendment to House Bill 569 would have directed the Mississippi State Department of Health to issue a CON to Oceans Healthcare to reopen the mental health ward at St. Dominic Hospital in Jackson, which has been shuttered for the past two years.
Oceans Healthcare, headquartered in Plano, Texas, operates a network of hospitals and outpatient facilities across several states that provide care to patients who suffer from mental illness or addiction. It already operates two such facilities in Mississippi, one in Tupelo and another in Biloxi.
Oceans’ plan in Jackson, though, is on hold due to a lawsuit filed by Merit Health, the only current provider of behavioral health services in the capital city area, over an interpretation of the state’s CON laws. The Department of Health ruled that Oceans did not have to go through the expensive and protracted regulatory process of filing for a new CON because taking over the facility at St. Dominic’s was considered just a “change in ownership,” not the creation of a new service. Merit disagrees.
Such a legal dispute needs to be settled in the courts, not by the Legislature. As Reeves said in his veto message, “if the legislature wants to maintain a CON regulatory environment, those regulations must be equally applied to all market participants without favoritism or prejudice.”
In the bigger picture, opponents and proponents of Mississippi’s CON laws both make legitimate arguments. Opponents say they artificially inhibit the free market, limiting competition, which translates into higher costs for health care. Proponents say that without CON laws, some providers, such as rural hospitals, could be put out of business by ambulatory clinics that cherry-pick the hospitals’ more lucrative patients, leaving the hospitals mostly with patients on whom they lose money.
Balancing these competing interests has been a subject of debate for years in the Legislature. This year’s reform bill was a compromise: leaving the CON laws in place but doubling the spending cap on three categories — major medical equipment, clinical health services and non-clinical health services — before the regulatory process is triggered.
Reeves indicated that he might be agreeable to adding the issue to the special session he will be calling before July 1 to deal with this year’s unfinished budget. The governor is unlikely, though, to give lawmakers a second crack at HB 569 this year unless it’s understood in advance that the Senate’s special carve-out for Oceans will be removed from the bill.
That’s a reasonable demand. It’s not the Legislature’s role to resolve what is essentially a legal dispute between competing businesses. The Senate should concede the point.
