Certificate of Need Requirements: State-by-State Guide
A certificate of need (CON) is a legal document that permits healthcare providers to open a facility or expand their current operations. The application process is intended to help control healthcare costs by ensuring new services are necessary for the community and do not duplicate existing ones.
A CON is currently required by 35 states, which govern this process using slightly different rules and regulations. In this article, we’ll provide an overview of how CONs work and outline resources to help you learn more about each state’s requirements.
What Is a Certificate of Need in Healthcare?
In healthcare, a CON is a form of approval that healthcare providers must obtain from the state before opening a new facility or program. Unlike other regulations that govern the quality of healthcare services, CON laws focus specifically on establishing a need. While exact laws vary by state, they typically cover:
- The types of facilities, services, or activities that require a CON.
- The regulatory body responsible for reviewing and approving applications.
- The information or data used to establish a need for services.
Why Were CON Laws Enacted?
New York became the first state to endorse a CON program for healthcare in 1964, with several other states following suit over the succeeding decades. Lawmakers believed that this would stop providers from creating unnecessary services and prevent taxpayers from covering such expenses.
However, these programs have also been heavily criticized for potentially limiting service availability and being associated with poor patient outcomes. Some states have since repealed their certificate of need laws because of these critiques.
How Do CONs Work?
Each state that requires a CON operates its own program. If a provider is interested in opening up a new facility, they must submit an application through their local regulatory health agency.
However, every state has different requirements for what types of services warrant a CON and the information that must be submitted to obtain one. To get a better idea of how this works, let’s take a look at the following certificate of need example:
A provider is interested in adding a pediatric department to their facility in Illinois. After reviewing the state’s laws, they realize that these services fall under the state’s CON requirements. The provider submits a CON application to the Health Facilities and Services Review Board. The board then assesses whether there’s an unmet need for pediatric services within the provider’s area.
How Are CON Applications Reviewed?
While CON requirements vary by state, applications are typically reviewed using a structured process that considers the needs of the community. This process may include:
- A proposal outlining the cost and impact of services.
- A public notice period or hearing inviting stakeholder and community feedback.
- An analysis and evaluation of local data to assess the need for services.
In certain cases, applications may be accepted contingent on the provider making modifications requested by the review board. Some states also allow applicants to submit an appeal if their application is denied.
What Are the CON Requirements by State?
If you’re interested in opening up a new service or facility, understanding your state’s specific certificate of need requirements is a fundamental step in the process. You can get more information on each state’s laws and regulatory health agencies in the table below.
*While Arizona, Minnesota, New Hampshire, and Wisconsin do not have formal CON programs in place, these states still require permits for certain types of facilities.
**In Massachusetts a CON is referred to as a “Determination of Need.”
Learn More About Healthcare Compliance in Your State
While a certificate of need will enable you to start a new service, maintaining your facility requires ongoing compliance. Need help staying up to date on the latest rules and regulations? Get dozens of healthcare management tips and insights delivered straight to your inbox.