AUGUSTA — A legislative committee voted 7-5 along party lines Thursday against an attempt to roll back the state’s Certificate of Need program, which closely regulates the expansion of hospitals and other health care facilities in Maine.

Democrats on the Legislature’s Health and Human Services Committee opposed the measure, sponsored by Rep. Richard Malaby, R-Hancock, while Republicans supported it.

Malaby said his bill, LD 162, would remove a layer of regulation that stifles free-market competition in health care that could ultimately lower costs and ensure Maine residents have access to the latest medical developments.

“The monopoly that we have created, the cost shifting that we endure, that we indeed promote, is driving up costs,” he said. “Until we start competing, we are never going to drive down costs. Until we have openness, we are never going to drive down costs.”

Maine’s per-capita spending on health care was fifth highest in the nation in 2009, according to the Kaiser Family Foundation.

But Democrats on the Legislature’s Health and Human Services Committee said the state’s Certificate of Need program is an essential part of the state’s cost containment strategy for health care. Unraveling the program could open the state up to for-profit health care providers that don’t accept patients insured by MaineCare, the state’s Medicaid program, some Democrats said Thursday.

“We can’t allow our infrastructure to be pulled apart just because we want to expand it and open it up to whatever market might like to just skim off the top and not take MaineCare payments,” said Sen. Margaret Craven, D-Lewiston, chairwoman of the Health and Human Services panel. “That’s my biggest concern with just throwing this to the wind and not caring for our current providers.”

The state’s Certificate of Need laws require hospitals and other health care providers receive state approval before they install major pieces of new equipment, undertake expansions, introduce new services and add to the number of hospital beds. State officials evaluate expansion proposals to determine if there’s sufficient need to support the added services.

Malaby’s proposal to repeal those laws came two years after lawmakers considered an identical proposal from former Rep. Jon McKane, R-Newcastle. The final bill stopped short of repealing Certificate of Need, but it exempted a wider range of health care facility investments from state approval.

“We made significant changes to CON last legislative session,” Rep. Ann Dorney, D-Norridgewock, said Thursday. “We should let those happen.”

At a public hearing Feb. 21, hospital representatives testified against repealing Certificate of Need while Gov. Paul LePage’s administration supported the legislation. After the hearing, Malaby proposed amending the bill by requiring state approval for hospital and health care facility expansion projects that would have a significant impact on costs in the state’s MaineCare program.

“If your project has no impact on MaineCare costs, then it is not appropriate for the state to tell you you can or cannot build it,” Malaby said.

Maine is one of 36 states with Certificate of Need requirements in place, according to the National Conference of State Legislatures. The federal government began requiring and funding Certificate of Need programs in 1974. The funding stream and associated requirements ended in 1987.

Advocates for Certificate of Need programs say the requirements ensure the health care system isn’t oversupplied with expensive hospital beds and equipment because the costs for those services are spread to anyone with health insurance.

But some Republicans on Thursday said Maine should take its cue from the federal government and repeal Certificate of Need.

“Prior to CON, our system was healthier,” said Rep. Deborah Sanderson, R-Chelsea. “CON caused the problem. That’s why you have seen the federal government repeal CON, because it wasn’t working.”

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