Certificate of Need (CON)

What is a certificate of need (CON)?

A certificate of need is a legal document required in many states or federal jurisdictions prior to making proposed changes to any new or existing healthcare facility.

To obtain a CON, developers of healthcare facilities must apply to the local governmental authorities by making the case for why the community in question would benefit from that new development. However, the exact criteria used to determine whether an application is approved can differ widely between states.

These proposed changes that require a CON can include any of the following scenarios:

  • Constructing any new healthcare facility
  • Renovating an existing healthcare facility
  • Closing an existing healthcare facility
  • Changing ownership of a healthcare facility
  • Adding a new healthcare service, or removing an existing service
  • Acquiring major medical equipment

According to the National Conference of State Legislatures (NCSL), a total of 35 states and D.C. across the U.S. still implement some kind of CON law. In states where CONs are required for some or all of the above changes, healthcare facilities must submit their certificate for approval before proceeding with any modifications.

The lack of consistent implementation across the U.S. has caused some pushback in states where CON laws are still in place.

What are the pros and cons of CONs?

Despite CON laws being in place in most states, not everyone agrees with their effectiveness. Supporters of the certificate of need framework argue that it helps to prevent unnecessary spending on healthcare infrastructure and services and that it can help states direct such infrastructure toward underserved regions.

On the other hand, critics argue that the CON framework protects the interests of established facilities. Many believe that by allowing political influence to decide which facilities can be built, the CON system invites corruption, manipulation, and abuse. Additionally, some opponents also argue that CONs have little impact on controlling healthcare costs, improving quality, or ensuring access to healthcare services for patients, and may do more harm than good in those areas.

Why are certificates of need (CONs) important in healthcare?

Certificates of need are important because they allow state governments to regulate changes that may impact or potentially increase healthcare spending.

The primary goal of these certificates is to ultimately reduce unnecessary healthcare costs by restricting duplicate healthcare services and assessing whether a new facility or service aligns with the needs of the community.

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