The committee has split Palin’s proposal, which also creates a state health commission, into two bills. The bill to repeal the CON permits is in Senate Bill 245, which has now been changes. Language creating the health commission has been shifted to a new bill, SB 300.

The CON bill has emerged as one of the most controversial bills of the 2008 session, with major health care providers lobbying to preserve the program, which they say protects community hospitals, and medical entrepreneurs arguing the permits preserve monopolies that result in higher medical costs.

The Senate committee did not complete work on the bill but has adopted changes in a House version of the legislation. In that version, the state would continue the CON permits, except in communities with populations of 60,000 or more. The exception would allow physician-owned clinics to offer open-imaging services without a state permit.

One concern that emerged in the Senate committee March 13 was whether the new commission, which will be largely appointed by Palin, a major critic of the program, should do a major study of the CON program authorized by the bill.

Sen. Kim Elton, D-Juneau, a member of the committee, said he would like to ensure that the study be supervised by a neutral party. Committee chairman Sen. Bettye Davis, D-Anchorage, said she would consider having the Legislature supervise the study through the Legislative Council, a House-Senate committee that coordinates research and technical assistance to the Legislature.