CON Quarterly: New papers, trends, and an update on the RHT Program
Welcome back to your quarterly dose of Certificate of Need news—
As a reminder, in markets where the government requires a certificate of need or CON, those who wish to offer a new service or expand an existing service must first prove to a regulator that the service is needed. As the name suggests, the regulator’s primary task is to determine if the service is needed, not to determine whether the provider is qualified or if his or her safety record is adequate.
CON laws can be found in a handful of industries, including rail transport, taxi service, and moving services. But their most prominent application in the U.S. is in healthcare. In about two-thirds of states, healthcare providers may not open or expand their services without first proving that the community needs new or expanded services. This process often requires healthcare providers to overcome their competitors’ objections that their service is not needed. As we will explore in this newsletter, CON laws tend to reduce patients’ access to low-cost, high-quality healthcare.
In this edition, we’ll (1) catch you up on the newest CON paper, (2) explain some recent trends in CON reform, (3) update you on how states are responding to the Rural Health Transformation Program, and (4) share some CON in the news stories.
That’s it. Please forward this newsletter to anyone you think might benefit from it.
CON Papers
Hot off the presses! Matt Mitchell and Steve Slivinski’s newly published George Mason Law Review article explores “After CON: What Happens When States Repeal or Modify Their Certificate of Need Requirements in Health Care?” This paper is well worth a read. Mitchell and Slivinski provide “evidence that states with limited or no CON regulation tend to have significantly more services per person.”
Specifically, they find that four years following major CON reform in Florida, investment in new hospitals increased by $1.5 billion as compared to the four years before CON reform. The number of home health agencies statewide doubled a decade after CON repeal. They also find that although the number of ambulatory surgery centers increased after CON was repealed, the number of ASCs per 100,000 residents stayed stable, showing that post-CON reform growth was necessary to keep up with population growth.
Trends in CON Reforms
If you have been following CON reforms over the past few years, you know that states around the country from Montana to South Carolina have been making significant reforms. This is a promising trend as laws in many states are finally starting to reflect what the data already tells us about CON laws—restricting supply drives up cost, drives down quality, and decreases access. We have been especially encouraged to see that the Northeast has been taking a hard look at CON laws in 2025 and 2026. This list is only CON reform bills enacted in the northeastern states over the past two years.
- In 2025, Washington, DC, repealed CON for primary care and telehealth, and raised its capital expenditure thresholds from $10 million to $15 million for facilities.
- In 2025, New York raised its capital expenditure thresholds through rulemaking. In certain cases, the threshold is now $60 million.
- In 2025, Vermont repealed CON for birth centers and raised its capital expenditure thresholds from $1.5 million to $10 million for facilities and from $1 million to $5 million for equipment.
- In 2026, New Jersey reformed its CON laws to make it easier to open and expand NICU bassinets and services.
- In 2026, Maine raised its capital expenditure thresholds for facilities from $3 million to $7.5 million with ongoing annual adjustments for inflation.
- In 2026, Maryland streamlined the process for approval to open a new intermediate care facility offering medically managed residential substance use disorder treatment services or to change bed capacity at an existing residential substance use disorder treatment facility.
Rural Health Transformation Program Update
In the last newsletter, we mentioned that AK, DE, IA, NE, RI, and TN committed to reforming their CON laws in their applications to the Rural Health Transformation Program. This program, administered by CMS, will give a preference to states with no CON laws or limited CON laws.
So far during this legislative session, DE, IA, RI, and TN are still actively working on these reforms.
- In Delaware, a bill to eliminate CON for equipment costing less than $5.8 million passed out of the House unanimously on March 24, 2026.
- In Iowa, CON reform was adopted in the governor’s larger healthcare reform package. The reforms include raising the capital expenditure thresholds from $1.5 million to $4 million (this number will increase to $4.5 million in five years and $5 million in ten years) and eliminating CON for the following services: air ambulance transport, cardiac catheterization, open heart surgery, organ transplant, outpatient mental health facilities, radiation therapy, replacement equipment, temporary services, and discontinuing services. We are still waiting for Governor Reynolds to sign the bill.
- In Rhode Island, Governor McKee included a robust set of CON reforms in his budget proposal. These reforms would repeal CON for ambulatory surgical centers, behavioral health services, home health, imaging equipment, outpatient rehabilitation, and substance use disorder treatment facilities. The proposal would raise the capital expenditure thresholds from $5 million–$7 million to $50 million, eliminate reapproval requirements for minor cost increases or the expansion of hospital and nursing home beds, exempt state capital projects from CON, and limit procedural delays by competitors or other market participants after a CON is issued. These reforms are being debated in both chambers.
- In Tennessee, both chambers of the General Assembly approved a bill to repeal CON for general acute care hospitals. If/when the governor signs this bill, CON will be eliminated for general acute care hospitals starting July 1, 2028.
Rural Health Transformation Program Update
- In 2021, Montana enacted legislation to repeal all CON laws except for long-term care. Frontier Institute published a report describing how this change has increased access to care for Montanans, finding a 12.5% increase in home health, outpatient surgery, and inpatient drug rehabilitation services. The report also confirms significant expansions in geographic service areas for home health agencies.
- Thomas Savidge wrote about CON at The Daily Economy, describing Matthew Mitchell’s survey of the academic literature on CON.
- In industry news, Becker’s ASC Review interviewed Janet Carlson, an ASC consultant, who reports that “CON is a market protection scheme, one that hospital systems have spent decades and enormous lobbying dollars keeping in place.” Ms. Carlson also notes that “CON is a barrier to affordable, accessible, reproducible surgical outcomes for patients throughout the United States.”
- A new CON threat? Mobile, Alabama, is considering enacting a county-wide CON for ambulance service. This wouldn’t be the first municipal-level CON in the country, but the State of Alabama already enforces a robust set of CON requirements. If the State didn’t include ground ambulance in its CON laws, it begs the question why local governments should be able to impose an additional barrier to access to ambulance services.
That’s all for now. Thanks for reading. Please let us know what you think about these updates and what you’d like to see in our next installment.
Best,
Jaimie and Sriparna
Jaimie Cavanaugh is state policy counsel at Pacific Legal Foundation, where she works with legislators across the country to end CON laws. She is a CON policy expert and regularly testifies at state capitols in support of bills to repeal or reform CON laws. She also helps behind the scenes by drafting bill language, gathering data for legislators, and building coalitions on the ground. Previously, she represented Nepali immigrants who challenged Kentucky’s CON laws in court after they were prevented from opening a needed home health agency. in court after they were prevented from opening a needed home health agency.
Sriparna Ghosh is an associate professor of economics at the University of Cincinnati (UC) Blue Ash College and also a research affiliate at the Knee Center for Studies of Occupational Licensing Regulation (CSOR). She received her PhD in economics from West Virginia University in 2017. As a trained applied microeconomist, she focuses on health, labor, and entrepreneurship economics in her research. More specifically, she focuses on understanding access and barriers within labor markets and health outcomes of underserved communities. In her current research project(s), she is investigating mechanism(s) of occupational licensing and certificate of need policies in understanding the relationship between public policy and health outcomes.
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