The North Carolina Certificate of Need (CON) Law requires health care providers to obtain a CON from the Department of Health and Human Services (Department) before developing or offering a “new institutional health service.” The term “new institutional health service” includes developing new health service facilities such as:
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The term also includes adding beds, operating rooms (ORs), gastrointestinal endoscopy (GI) rooms or dialysis stations to existing health service facilities and initiating new cardiac catheterization services, open-heart surgery services, burn intensive care services, neonatal intensive care services, or solid organ or bone marrow transplantation services. In addition, the term includes the acquisition of major medical equipment cardiac catheterization equipment, Gamma Knives®, heart-lung bypass machines, linear accelerators, lithotripters, magnetic resonance imaging (MRI) scanners, positron emission tomography (PET) scanners and simulators. The term also includes relocation of health service facility beds, operating rooms, GI endoscopy rooms or dialysis stations from one licensed facility or campus to another.
A State Medical Facilities Plan (SMFP) is prepared annually for the Governor’s approval by the Department and the North Carolina State Health Coordinating Council (SHCC), an advisory body consisting of 25 members appointed by the Governor. The SMFP includes need methodologies for determining the need for all of the facilities and services listed above with the exception of diagnostic centers, hospice residential facilities or beds, neonatal intensive care services, and acquisition of major medical equipment, heart-lung bypass machines and simulators. Relocation of nursing facility beds, adult care home beds and dialysis stations are addressed in policies in the SMFP. Relocation of other types of health service facility beds, operating rooms and GI endoscopy rooms are not addressed in the SMFP.
The SHCC holds three meetings a year. There are three standing committees: Acute Care Services; Long-term and Behavioral Health; and Technology and Equipment. Each committee holds three meetings a year. All meetings are open to the public. A public hearing is held immediately following the first SHCC meeting of the year. Comments and petitions regarding need methodologies or policies that involve a statewide impact are accepted at that time. A Proposed SMFP is published on or about July 1 and six public hearings are held that month. Comments and petitions regarding adjustments to need determinations are accepted at that time.
The Healthcare Planning and Certificate of Need Section in the Division of Health Service Regulation (Agency) is responsible for supporting the SHCC in the development of the SMFP, reviewing CON applications and monitoring project development.
Application forms can be obtained from the Agency. The completed forms must be accompanied by the appropriate filing fee. The base fee is $5,000. There is an additional fee of $0.003 for every dollar of the projected capital cost of the project greater than $1,000,000. The maximum filing fee is $50,000. The filing fee is not refundable even if the application is denied.
There are two different certificate of need application forms; the correct form to use depends on the type of facility or service proposed. If prospective applicants are uncertain as to whether a certificate of need is needed for a project, or unsure which form to use, please contact the Project Analyst for the county where the project will be located. Contact information is available at our Staff page under county assignments.
The Agency must determine if the application is consistent with the review criteria in the CON Law and any applicable rules adopted by the Agency. The Agency may approve or deny an application outright, or it may approve the application with conditions it finds necessary to bring the project into compliance with the review criteria or the rules.
The following is a brief summary of the CON application process. Applicants and other interested persons should always refer to the CON Law and the rules adopted by the Agency for more complete information.
Application Submittal – The Agency reviews CON applications according to a batched review schedule which is described in Chapter 3 of the SMFP. Applications must be received no later than 5:00 p.m. on the 15th day of the month prior to the beginning of the applicable review period. When the 15th falls on a weekend or holiday, the deadline is 5:00 p.m. on the next business day. The filing deadline is absolute. After an application is submitted it may not be amended, however, the Agency may request that an applicant submit clarifying information.
Public Comment Period – During the first 30 days of the review period, any person may file written comments or letters of support concerning proposals under review.
Public Hearing – Under certain circumstances, a public hearing is required to be conducted by the Agency no more than 20 days from the conclusion of the written comment period. The public hearing is held in the service area where the project will be developed.
Application Review – The Agency has from 90 to 150 days to review a CON application. Each application is reviewed against the review criteria in the CON Law and any applicable rules adopted by the Agency. All written comments and comments made at the public hearing are also taken into consideration by the Agency as part of the review. In order to be approved, an application must be conforming or conditionally conforming with all applicable review criteria and rules.
Competitive Reviews – Applications are competitive if they, in whole or in part, are for the same or similar services and the agency determines that the approval of one or more of the applications may result in the denial of another application reviewed in the same review period.
If two or more applications are determined to be part of a competitive review, the Agency reviews each application independently against the review criteria in the CON Law and any applicable rules adopted by the Agency. The Agency then conducts a comparative analysis of the applications to determine which application to approve. The need determination in the SMFP is a determinative limit on the number of beds, services or equipment that the Agency can approve.
Appeals of Decision – Within 30 days after the date of a decision, any affected person may file a petition for a contested case hearing with the Office of Administrative Hearings. The administrative law judge (ALJ) must make his final decision within 270 days after the petition is filed. The ALJ’s decision may be appealed to the N.C. Court of Appeals.
Monitoring of Project Development – After the certificate of need is issued, the Agency monitors development of the project by requiring that the certificate holder submit periodic progress reports on the form provided by the Agency.
Enforcement – The Agency may withdraw a certificate of need if the certificate holder does not develop the project in a timely manner and cannot show that it is making a good faith effort to develop the project in a timely manner. The Agency may also withdraw a certificate of need if the certificate holder does not develop the project in a manner consistent with the representations made in the application or with any conditions the Agency placed on the certificate of need.