|
Getting your Trinity Audio player ready...
|
Thinking about opening a healthcare facility? In some states, you may need approval before you can break ground. Here’s what you need to know.
You may have noticed a lack of urgent care centers, nursing homes, or hospice services in your community and want to address the growing demand. In some states, you can focus on the operational and logistical challenges of opening a facility without additional regulatory hurdles. In others, however, you must first obtain approval from a state agency before starting your project. Only after this approval can construction begin. This approval comes in the form of a Certificate of Need (CON).
Why Do States Require a CON?
The CON process is designed to regulate healthcare development and prevent unnecessary facilities from driving up costs. The idea is to ensure that a community genuinely needs a new facility or service before allowing its construction. States with CON laws fear that without this safeguard, an overabundance of facilities could lead to increased healthcare costs, as providers attempt to recover construction expenses despite insufficient demand.
How Do I Know If I Need to Apply?
Currently, only 15 states do not have CON laws:
- Arizona
- California
- Colorado
- Idaho
- Kansas
- Louisiana
- New Hampshire
- New Mexico
- North Dakota
- Pennsylvania
- South Dakota
- Texas
- Utah
- Wisconsin
- Wyoming
If you are in one of the remaining 35 states or the District of Columbia, your project may require a CON before you can lawfully open or expand a healthcare facility. Each state sets its own rules regarding which facility types and activities require a CON.
For example, in Illinois, a CON is required not only for new construction but also for changes in ownership or significant modifications to an existing facility’s scope or operations. In New York, certain healthcare facilities must obtain a CON even when adding or discontinuing a service. Because CON laws vary widely, it is important to assess the specific regulations governing your state.
What Must I Include in My Application?
The application process can be complex, with requirements that typically include:
- A detailed description of the project
- The location and proposed floor plans
- Construction phases and timelines
- The types of services the facility will provide
- A justification for why the project is necessary
- Financial documentation, including proof of funding and economic feasibility
Some states have additional, unique requirements. In Illinois, for instance, applicants must submit a safety net impact statement addressing the project’s effect on healthcare access in the community. This includes evaluating its impact on racial and healthcare disparities, as well as on other providers in the area. A careful review of your state’s application requirements is essential to ensure compliance.
Get Legal Support
The attorneys at Jackson LLP understand the challenges of navigating the CON process. If you operate in one of the states where we practice, schedule a free consultation to discuss how we can assist you.
This blog is made for educational purposes and is not intended to be specific legal advice to any particular person. It does not create an attorney-client relationship between our firm and the reader. It should not be used as a substitute for competent legal advice from a licensed attorney in your jurisdiction.
