CON Quarterly: New research, a state legislative round-up, and CON news coverage

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.

This edition includes: (1) the newest CON research, (2) a state legislative round-up, and (3) some news coverage of CON laws.

Please forward this to anyone you think might benefit from it.

CON Papers

1. Sriparna Ghosh, Justin Leventhal, James Bailey, and Conor Norris released a database of changes to CON for hospitals over time in every state. Be on the lookout for the data launch soon!

2. Dr. Kurtis D. Carlock et al. published a new paper looking at the effect of limiting ambulatory surgery centers (ASCs) with CON laws. The authors compared outcomes in Illinois (a CON state) with Indiana (a non-CON state) and found that for hip and knee replacement surgeries in ASCs, Illinois patients were 3.7 times more likely to have surgery out-of-state than patients in Indiana. Using national average Medicare facility fee data, the authors estimated a net migration of $18,085,000 in facility fee reimbursement out of Illinois.

3. A new paper from Jessica Dobrinsky and the Cardinal Institute summarizes the research on CON for hospice, nursing homes, and home health agencies and the impacts of enforcing CON for these sectors. And for more coverage on hospitals and maternity care in West Virginia, check out Jessica’s Substack, Clear Lines.

4. New research from Liam Sigaud and Pacific Legal Foundation finds that on average, CON states have 36% fewer emergency departments per 100,000 residents than non-CON states. CON states also have 15% fewer EMTs and 24% fewer ambulance stations per 100,000 residents, demonstrating that CON laws restrict access to emergency services.

5. Stephen Slivinski and Matthew D. Mitchell published a briefing paper with a thorough background of CON laws and a summary of the empirical research on their negative effects.

CON Reforms in the States

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. That trend continued in 2026. Here are the reforms we were watching.

• Delaware repealed CON (called certificate of public review there) for all major medical equipment costing less than $5.8 million and adjusted upward for inflation in the future.
• Iowa included major reforms in its budget bill. The changes included raising the threshold that triggers a CON to $4 million and adjusting upward in the future, as well as exempting many services from CON, such as air ambulance transport, cardiac catheterization, open heart surgery, organ transplant, outpatient mental health facilities, radiation therapy, replacement equipment, temporary services, and discontinuing services.
• 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.
• Maine raised its capital expenditure thresholds for facilities from $3 million to $7.5 million, with ongoing annual adjustments for inflation.
• Minnesota passed a bill to add 85 licensed beds at Regions Hospital in Saint Paul.
• Mississippi enacted two bills. One requires the Department of Health to study exempting small hospitals from CON for dialysis and geriatric psychiatric units and requires adult psychiatric units to offer a certain amount of charity care or pay a fee. It also raises the threshold that triggers a CON to $20 million for nonclinical health services, $10 million for clinical health services, and $3 million for major medical equipment. The second bill exempts small community hospitals from CON in certain circumstances. It also contains a fee-shifting provision that requires a party appealing a CON approval to reimburse a successful applicant for reasonable attorney’s fees.
• Nebraska enacted a small reform adding a three-year expiration date to approved CON applications.
• North Carolina included repeal for inpatient rehabilitation services in its budget bill.
• New Jersey reformed its CON laws to make it easier to open and expand NICU bassinets and services. Separately, New Jersey also enacted a bill creating a temporary, two-year exemption from CON for existing psychiatric facilities and hospitals to convert acute adult psychiatric beds to specialty psychiatric beds without a CON.
• Rhode Island enacted a major reform proposed by the governor and included in the budget. The proposal raises the threshold that triggers CON (called determination of need in Rhode Island) to $50 million for new facilities, repeals CON for ASCs, home health and home nursing care, inpatient hospice, substance use treatment centers, most new or expanded healthcare services, bed capacity adjustments, and imaging equipment and repealed the competitor’s veto, meaning direct competitors can no longer oppose a new application.
• South Carolina repealed CON for Veterans Homes owned or operated by the Department of Veterans Affairs.
• Tennessee repealed CON for acute care hospitals effective July 1, 2030.

CON in the News

1. In The Daily Economy, Vance Ginn wrote about the problem with CON laws in Mississippi. Because CON laws create monopolies, patients in states with CON laws can suffer worse consequences from cyberattacks that shut down big systems. The lack of competition means they don’t have anywhere else to seek care.

2. Rich Daly wrote about CON reforms, reporting that the Tennessee Hospital Association was “neutral” on repealing CON for acute care hospitals.

3. Mitch Kokai of The John Locke Foundation wrote about the status of the Institute for Justice’s NC CON lawsuit that remains pending at the North Carolina Court of Appeals.

4. Dr. Richard Menger makes the case for broad CON repeal in Forbes.

5. Stacie Beck of the Caesar Rodney Institute wrote about CON and the Rural Health Transformation Program in Delaware.

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 senior state policy counsel at Pacific Legal Foundation, where she works with legislators across the country to end CON laws. She is a national 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.

Sriparna Ghosh is an associate professor of economics at the University of Cincinnati (UC) Blue Ash College and a research affiliate at the Knee Center for the Study of Occupational Regulation (CSOR). She received her Ph.D. 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 projects, she is investigating mechanisms of occupational licensing and certificate of need policies in understanding the relationship between public policy and health outcomes.

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