The four-part HC Topics Series: CON Law will provide an in-depth examination of Certificate of Need (CON) programs and their impact on the healthcare industry.  The first installment provided an overview of states’ CON programs and the history of their development, and this month’s Part II installment will discuss the current state of CON regulations.  Part III will evaluate CON programs against the changing landscape of the healthcare industry, and Part IV will examine the impact of the Patient Protection and Affordable Care Act (ACA) on CON programs.

Last month’s installment of the HC Topics Series: CON Law discussed the history of states’ CON programs and how, despite repeal of the National Health Planning and Resources Development Act (NHPRDA) and the loss of supporting federal funds, the majority of states elected to maintain or implement CON programs.¹ Numerous studies conducted throughout the late 1970s and 1980s demonstrated that CON restrictions had little to no effect on controlling healthcare costs, yet today, most states continue to restrict the supply of healthcare facilities or services in some way, and proponents of CON still assert cost-containment as a rationale for such restrictions.² This month’s installment of the CON Law Series will examine the current state of CON regulations across the country.

In the United States today, 36 states, the District of Columbia, and the Commonwealth of Puerto Rico have some form of a CON program.³ However, of the states that discontinued their CON programs following the repeal of the NHPRDA, every state still utilizes some process to control costs and prevent duplication of services.⁴ The CON programs currently in existence regulate several different types of facilities and services, and these restrictions vary widely from state-to-state.⁵ At present, most states with CON programs tend to focus on long-term care and outpatient facilities.⁶

Of the states with CON programs in effect, most restrict traditionally high-cost healthcare services, including: cardiac catheterizations; open heart surgeries; and, radiation therapy.⁷ Approximately half of the states with CON programs restrict organ transplants; gamma knives; lithotripsy; and, magnetic resonance imaging (MRI) and positron emission tomography (PET) scanners.⁸  Roughly one-third of CON states restrict computed tomography (CT) scanners; dialysis; and, burn care, and four CON states restrict ultrasounds: Hawaii; Maine; Vermont; and, the District of Columbia.⁹ Arizona, though not a CON state, is the only state in the country that restricts ground ambulance services.¹⁰ Most of the states with CON programs also restrict several service lines, including: psychiatric services; rehabilitation; and, neonatal intensive care.¹¹ Approximately half of the current CON programs restrict services for home health; hospice; and, substance/drug abuse, and roughly one-third of the current CON programs restrict obstetric services.¹² For facilities, most of the current CON programs restrict acute care hospital beds; ambulatory surgical centers (ASCs); and, intermediate care facilities/mental retardation (ICF/MR).¹³ Five states with CON programs restrict assisted living and residential care facilities: Arkansas; Louisiana, Missouri; North Carolina; and, Vermont.¹⁴ Two of the current CON programs restrict medical office buildings: Vermont and the District of Columbia.¹⁵ Twenty-eight CON states restrict long term acute care (LTAC), and nursing home/long term care is restricted by thirty-seven current CON programs, which include thirty-six states and the District of Columbia.¹⁶

In addition to each CON state’s general restrictions, some states have imposed a moratorium on certain services and facilities, meaning that no CON application for those services or facilities will be approved. Alabama has placed a moratorium on nursing home and inpatient hospice beds, and both Arizona and Louisiana have restricted any additional intermediate care/mental retardation facilities (ICF/MR).¹⁷ Arkansas has also restricted any additional residential care facilities (RCFs) or psychiatric residential facilities for children/adolescents, and Mississippi has restricted any additional home health agencies.¹⁸ Both Nebraska and New Hampshire have restricted additional rehabilitation beds, and seven states have placed a moratorium on additional long-term care/nursing home beds, many of which have been in place for more than a decade.¹⁹

Despite ample evidence that CON programs are ineffective at controlling healthcare costs, most states today use some form of CON restrictions to control the supply of healthcare facilities and services.  As the industry undergoes changes in the delivery of care, technology, and reimbursement, states that utilize CON may be forced to reevaluate the effectiveness of these restrictions.  Next month’s installment in the HC Topics Series: CON Law will examine CON programs against the changing landscape of the healthcare industry.

CON Law Series – Part I – A Controversial History