States are suspending Certificate of Need laws in the wake of COVID-19 but the damage might already be done

Updated on January 11, 2021

With the spread of COVID-19 pushing hospitals to full or near-full capacity in Florida, New York, Washington, and elsewhere, numerous states are reevaluating one policy that is meant to prevent the growth of health care services and facilities.

Certificate of Need (CON) laws currently exist in 38 states across the country and DC. CON laws require would-be health care providers or existing health care providers wanting to expand to obtain permission from the state before they’re allowed to open or expand. To get permission from the state, the providers need to prove that their service or facility is needed. However, to determine whether a health care applicant is “needed,” states allow the applicants’ competitors—usually other health care providers or hospitals—the ability to veto their application by arguing that there is no need.

In the wake of the COVID-19 pandemic, 24 states that have CON laws on the books have suspended some portion of them or enabled emergency provisions.

20 states have suspended CON laws include:

• The North Carolina Department of Health and Human Services, on March 12, temporarily lifted its CON law for hospital beds, but recently denied a Certificate of Need for a new facility.
• New Jersey’s Department of Health, on March 13, waived that state’s CON law for additional hospital beds.
• The Connecticut Office of Health Strategy, on March 16, temporarily waived Certificate of Need review requirements for projects deemed necessary to respond to COVID-19.
• Iowa’s governor, on March 17, suspended that state’s CON law for hospital beds.
• Indiana’s governor waived requirements for nursing home Certificates of Need on March 19, which is the only medical service required to obtain a Certificate of Need in Indiana.
• South Carolina’s governor, on March 19, suspended the state’s CON law for projects deemed necessary to respond to COVID-19.
• Tennessee’s governor, on March 19, suspended the state’s CON law for projects deemed necessary to respond to COVID-19.
• Georgia’s governor, on March 20, called for the suspension of Georgia’s CON law indefinitely for projects deemed necessary to respond to COVID-19.
• New York’s governor, on March 20, suspended the state’s CON law for projects deemed necessary to respond to COVID-19.
• Virginia’s governor, on March 20, authorized the suspension of the state’s CON law to increase hospital beds.
• Massachusetts’s Commissioner of Public Health, on March 24, suspended that state’s Determination of Need for projects deemed necessary to respond to COVID-19.
• The Vermont Green Mountain Care Board, on March 25, established procedures for emergency Certificates of Need.
• Washington’s governor, on March 30, suspended Certificate of Need requirements for nursing homes and assisted living facilities.
• Alaska’s governor, on March 31, suspended that state’s CON law to expand hospital capacity until May 12, 2020.
• Nebraska’s governor, on March 31, suspended that state’s CON law for hospital beds.
• Alabama’s governor, on April 2, authorized the suspension of the state’s CON law for projects deemed necessary to respond to COVID-19.
• Oklahoma’s Governor, on April 8, suspended the state’s CON law for hospital beds.
• The Maine Department of Health and Human Services, on April 10, allowed for the issuing of emergency Certificates of Need.
• Rhode Island’s Governor, on April 10, suspended that state’s CON law for projects deemed necessary to respond to COVID-19.
• Florida’s Governor, on May 31, suspended the state’s CON law for ambulance services.

Four states have activated emergency provisions:

• The Maryland Health Care Commission has issued several emergency Certificates of Need, the first on March 18.
• Michigan’s governor, on March 18, allowed for the issuing of emergency Certificates of Need.
• The Kentucky Cabinet for Health and Family Services, on April 1, began issuing emergency Certificates of Need.
• The Illinois Health Facilities and Services Review Board, on April 20, confirmed the use of emergency provisions to expand hospital beds.

In addition, Arkansas and Hawaii have emergency provisions that may be in use.

Even though many states are reacting quickly to try to alleviate strains on their medical systems, much of the damage from these CON laws has already been done. For example, on March 20, the New York governor suspended CON laws giving providers less than a week to ramp up before capacity was reached—nowhere near enough time to effectively increase health care capacity.

This is one reason the laws should not exist in the first place. Providers know whether there is a need for services or facilities. Allowing them the flexibility to respond in a pandemic is obvious, but they should have the same flexibility year-round.