Issue Brief by Policy Analyst, Erin Twomey Partin | etpartin@csg.org

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Certificate of Need (CON) laws are regulations on healthcare facilities and providers designed to measure and define the need for services, increase access to healthcare, and control healthcare costs. Since the State of New York first enacted CON in 1964, this method of regulation has gained and lost popularity several times. States continue to examine data on CON’s effectiveness and reassess how the regulatory framework fits into today’s healthcare market. This regional resource will explore the history of CON laws, discuss current statutes throughout the CSG South fifteen-state region, analyze the impact of CON, and explore various paths forward for CON regulations.

The Road Previously Taken: History of CON Laws

Inception

Certificate of Need (CON) laws are a by-product of the 1960s-1970s “health planning era,” a time characterized by health policymakers’ hopes to develop and implement strategies aimed at making healthcare facilities and services more accessible. Previously used during the Great Depression in the transportation industry to regulate market saturation, CON laws in the healthcare industry were meant to assess the need for new healthcare facilities and services, bring services to underserved communities, and mitigate rising healthcare costs.

Certificate of need laws emerged in the healthcare industry in 1964 when the State of New York enacted what has become known as the Metcalf–McCloskey Act.³ Following this, the federal government passed the National Health Planning and Resources Development Act (NHPRDA) in 1974, which provided federal funding to states that implemented CON, including a total of $1 billion (approximately $6.5 billion in today’s dollars), and proposed severe financial penalties for failure to do so.⁴ Though the financial penalties never materialized, the threat pushed almost all states to enact CON laws.⁵ By 1982, every state except Louisiana had a CON program that complied with the NHPRDA.⁶

Change in Political Landscape

In 1979, Massachusetts released an evaluation of the impact of their state’s CON law. Through a cost-benefit analysis, it showed that the projected costs of the application process and fees, state for administrative costs, and costs to the health system ($108 million from 1972 to 1977) outweighed the projected benefits ($90 million over the same period).⁷ Knowing this analysis was limited, Rhode Island conducted a similar study that measured costs and benefits using additional data points. This analysis found that the benefits were nearly $250 million more than the costs.⁸

Political concern for healthcare spending persisted into the early 1980s. As a result, Congress passed the Social Security Amendments of 1983, which changed the methods by which Medicaid reimbursed providers for services. Discussed in more detail in a later section, this change in reimbursement essentially eliminated the market incentive for providers to overproduce services.

In 1986, Congress repealed the NHPRDA requirement for states to adopt CON laws.⁹ As a result, 12 states immediately repealed existing CON laws. Today, 35 states have some variation of a CON law, though many have significantly relaxed their capital improvement thresholds and lessened the types of services that require a CON. Table 1 shows when each of the CSG South member states originally enacted CON laws and, where applicable, repealed and reenacted them.

TABLE 1. Dates for CSG South Member States’ CON Law Original Enactment, Total Repeal, and Reenactment

State	Original Enactment	Total Repeal	Reenactment
Alabama	July 30, 1979
Arkansas	March 25, 1975
Florida¹	July 1, 1973
Georgia	July 1, 1979
Kentucky	July 1, 1972
Louisiana	July 6, 1990
Mississippi	July 1, 1979
Missouri	October 1, 1980
North Carolina	July 21, 1971	March 28, 1973	January 1, 1979
Oklahoma	April 8, 1971
South Carolina²	June 3, 1971
Tennessee	July 1, 1973
Texas	May 26, 1971	January 1, 1985
Virginia	March 9, 1973
West Virginia	July 8, 1977

Approaching the Fork in the Road: Current Southern State CON Laws

It is typical for states with CON laws to require a certificate of need for certain facilities and services. Typically, states require a CON for hospitals and long-term care facilities like nursing homes. Additionally, states often require a CON for any changes to previously licensed facilities or services that would change the level of service provided, such as changing a facility’s bed capacity or acquiring new medical equipment.¹⁰

Many states in the South have recently modernized their CON laws. For instance, Florida passed a complete overhaul of its CON laws in 2019, which now only requires CON for hospitals and long-term care facilities.¹² Similarly, South Carolina partially repealed its CON laws in 2023. It now only requires CONs for long-term nursing facilities, hospitals, and specific services.¹³ Appendix A outlines current CON requirements in each of the fifteen states in the CSG South region.

Making all the Difference?

Policymakers intended CON laws to achieve three overarching goals: accurately measure and define the need for healthcare services, increase and equitably disperse care, and control healthcare costs. Since the policy’s federal inception in 1974, researchers have tested these goals by evaluating data from states with and without CON laws. This has resulted in a wealth of information on how CON laws have impacted the healthcare industry in each goal area. Reviewing efficacy for each goal offers insights into the actual impact these laws have had on the healthcare industry.

Measuring and Defining Need

One of the key tenets of CON is that providers must undergo a review process to show a service or facility is needed. Although individual review processes vary by state, applicants are generally required to provide proof in the form of population and demographic statistics, information on nearby providers, and projected utilization data.¹³ The idea behind this process is that a state’s regulatory agency (usually a state’s Department of Health Services or equivalent department/agency) has a broader perspective of the state’s needs due to its knowledge of programming initiatives, nonprofit activities, and other CON applications under review.

In most states with CON laws, pre-existing providers have the right to protest an application for a CON. If a current provider determines that the additional facility or service would negatively impact their ability to provide care, they can submit a counter-request, accompanied by evidence to support their claim.¹⁴ This process can include a formal written rebuttal, a hearing, or both. Of the states in the CSG South region that continue to operate with at least a partial CON program, Louisiana is the only state that does not currently permit a counter-request showing evidence in opposition of an application.¹⁵

There is a concern that larger providers might use this path to limit competition by biasing the review of an area’s needs. While the regulatory agency must consider this information, an incumbent/existing health provider’s protest does not necessarily mean the applicant will not receive a CON. Regulatory agencies can use several public and private databases to corroborate the claims of both the applicant and the petitioner.¹⁶

Access and Distribution of Care

Assessing CON’s ability to improve access to care hinges on one’s understanding of “access to care.” Improving access to care could mean ensuring people can obtain all types of healthcare – primary or specialty. Access to care can also refer to access to a singular type of care. Whichever lens one views access to care through, it can shape one’s perception of CON’s effectiveness.

Access to All Types of Care

Thinking of access as the former, healthcare systems in areas with lower populations should benefit from the CON application and review process because it limits market oversaturation. One of CON’s intentions is to promote a controlled, steady expansion of services, especially in underserved areas. By restricting new facilities and services based on perceived need, CON laws can mitigate underutilization so that there is not a surplus of healthcare on the market, which would potentially lead to providers leaving the market (i.e. facility closures). This process creates controlled expansion, which, in turn, ensures the healthcare market persists in the designated area.¹⁷

CON is thought to improve access to care further by preventing cherry-picking, the practice of providing more profitable services to patients who are more likely to pay the full cost of care. For example, hospitals operate multiple departments, some of which are more profitable than others (e.g., surgical departments versus emergency departments). Additionally, nonprofit hospitals serve all types of patients, regardless of their ability to pay. A hospital can allocate the revenue generated by one department to assist subsidize less lucrative departments and loss of revenue due to indigent care. This better equips the hospital to provide all types of care to all types of patients.¹⁸

In states without CON laws, new healthcare providers may enter the market and determine the types of services they will offer and the patients they will serve. For-profit organizations, like all businesses, structure their operations around financial sustainability, which can lead them to focus on services or patient populations that align with their business models. When a profitable service, such as an ambulatory surgical center (ASC), opens in a community, it may draw some surgery patients away from local hospitals. Supporters of CON laws argue that these shifts can reduce hospital revenue and limit the ability of full-service hospitals to subsidize less profitable departments and services.¹⁹

Research presents varying findings on the behavior of for-profit healthcare providers. Some studies suggest that for-profit entities may engage in selective service provision, sometimes described as “cherry-picking.” One study found that for-profit hospitals were more likely to treat high-cost patients than nonprofit hospitals.²¹ In addition, a report prepared for the American Hospital Association noted that for-profit hospitals tend to have lower levels of unreimbursed and uncompensated care as a share of net patient revenue compared to nonprofit hospitals (3.1 percent and 6.7 percent, respectively).²¹

These findings contribute to an ongoing policy discussion about how different ownership structures influence service availability, patient mix, and the financial stability of hospitals in competitive healthcare markets.

Access to Single Types of Care

When viewing access to care as access to a singular type of care, data show CON could be limiting access. A 2024 literature review found that of the 190 tests evaluating CON laws’ effect on access to care, 52 percent (99 tests) found that CON is associated with decreased access to care,²² and 38 percent (72 tests) found it did not impact access to care. CON states have 25 percent fewer open-heart surgery programs,²³ 20 percent fewer psychiatric care facilities,²⁴ and fewer and reduced capacity dialysis clinics.²⁵

Not only is access to individual types of care found to be diminished in CON law states, but CON laws have also been associated with lower quality of care, thus rendering the accessible care as deficient. CON laws have been found to statistically increase wait time for medical examinations²⁶ and hospital discharge.²⁷ States with CON laws also have lower staff-to-patient ratios in nursing homes and higher mortality rates for cardiovascular patients.²⁸ Opponents of CON laws argue that limiting competition diminishes incentives for quality improvement, while supporters maintain that regulation helps ensure appropriate resource allocation.

Distribution of Care

Regulatory boards must weigh special considerations when assessing the need for healthcare in a rural area. People in rural areas face several barriers when trying to access healthcare, one of which is proximity to care. It takes rural residents, on average, about seventeen minutes to reach the nearest hospital.²⁹

Approximately sixty million Americans live in rural areas,³⁰ with nearly half of that population residing in the South,³¹ making proximity to care a proportionally larger area of concern for Southerners. Concern for proximity has been on the rise as more rural hospitals struggle to stay open. Between 2010 and 2023, 148 rural hospitals closed nationwide.³² In 2020, Congress created the Rural Emergency Hospital (REH) designation as a means³³ to curb rural hospital closures. As such, CON regulatory agencies now must take hospital’s designation and the requirements to maintain that designation – and therefore the hospital’s funding – into account when determining if services should be expanded in an area, which can be a tricky balancing act.

Although additional variables like declining rural population,³⁴ a state‘s GDP and economic measures,³⁵ and population demographics³⁶ could be contributing to the decline in access to healthcare in rural areas, opponents of CON often observe that when controlling for these variables, patients in CON states have 30 percent fewer rural hospitals, and 14 percent fewer ambulatory surgeries.³⁷ Furthermore, evidence shows that safety net hospitals (hospitals that provide care to vulnerable populations) have higher profit margins in states that do not have CON laws.³⁸

CON application approval rates in six CSG South states (Table 2) indicate that regulatory boards approve most applications they receive. This pattern suggests that factors beyond the approval process itself may influence the overall number of applications. Some analysts note that lengthy or costly application requirements could discourage certain providers, particularly for-profit entities, from entering CON states. In contrast, others point to market conditions, demographic trends, and local demand as additional factors that may shape provider decisions.

TABLE 2. CON Application Approval Rate for 2024

State	Applications (2024)	Approved Applications	Rate of Approval
Florida³	68	33	48.5%
Georgia⁴	28	15	53.6%
Missouri⁵	77	72	93.5%
North Carolina⁶	114	93	81.6%
South Carolina⁷	17	17	100%
Virginia⁸	48	48	100%

Controlling Healthcare Costs

The Basics

Because healthcare is inelastic, meaning the demand is not highly reactive to changes in the market price, lessening the supply of healthcare should cause the price of healthcare to rise (as seen in Figure 1). However, this line of logic operates under the assumption that the healthcare market is a perfectly competitive and free market, which does not fully reflect the structure of the U.S. healthcare system. For example, Medicaid reimbursement accounts for approximately 19 percent of all healthcare spending nationally, and over half of all long-term care payments.⁴⁵ When healthcare providers receive reimbursement through Medicaid, they receive a fixed payment rate, not one determined by a free, competitive market.

Although healthcare markets do not operate as perfectly competitive markets, the data show that patients in CON law states pay higher prices for care per capita.⁴⁶ and per service.⁴⁷ In addition, CON laws are associated with higher costs in general acute hospitals.⁴⁸ and higher Medicaid costs for home health services.⁴⁹ Conversely, states that have repealed their CON laws have 5.5 percent lower hospital costs five years after repeal.⁵⁰

The tension between these two truths likely stems from the varying healthcare markets of individual states. There are currently ten states that have not expanded Medicaid under the Affordable Care Act, seven of which are in the CSG South region.⁵¹ The number of people covered by Medicaid and the percentage of healthcare payments that account for each state may influence how CON policies interact within the market because it determines where that healthcare market falls along the free/command-market spectrum.

FIGURE 1. Supply decreases while demand stays constant, resulting in an increase in price.

The supply and demand curves shown in Figure 1 illustrate what happens when the amount of available healthcare provision (supply) decreases or is otherwise limited. The equilibrium – the point where the amount supplied matches the amount demanded at a particular price – will shift. The price of healthcare (on the vertical axis) will increase, while the amount provided (the demand, on the horizontal axis) will decrease.

An Evolving Healthcare Market

When CON laws first emerged in the 1960s and then became federally mandated through the National Health Planning and Resources Development Act (NHPRDA) in 1974, healthcare reimbursement functioned differently than it does today. In 1983, the Social Security Amendments Act (SSA) transitioned Medicaid reimbursement from a retroactive, cost-based repayment system to a prospective, fixed-cost payment system. This shift in reimbursement protocol meant hospitals and other healthcare systems no longer had the incentive to purchase equipment, increase bed capacity, or run unnecessary diagnostic tests to increase a subsequent payout, the cost of which eventually fell upon the patient.⁵² Today, provider reimbursement is still primarily based on predetermined costs of services and a fixed Medicaid reimbursement rate.⁵³

Opponents of CON argue the broader market shift associated with the 1983 SSA altered CON’s role helping manage healthcare costs. They note that CON policies were originally developed to address what was viewed at the time as a provider-related moral hazard, such as ordering unnecessary tests or procedures or investing in additional equipment and facilities with the expectation that insurance would absorb the expense. According to this perspective, these behaviors contributed to an oversupply of services. Opponents contend that the 1983 shift to prospective payment under the SSA moderated these incentives by placing greater emphasis on cost efficiency, thereby reducing the conditions that CON laws were designed to address.

Cost-Benefit

As with any market, the healthcare market does not exist in a vacuum. Therefore, pinpointing the exact impact of CON laws on healthcare can be a challenging task. One way to evaluate CON’s encompassing relationship is to consider its costs and benefits. A 2020 cost-benefit analysis by BMC Health Services Research found that CON’s cost-to-benefit ratio is 1.08, meaning the costs are approximately 8 percent higher than the benefits (the average costs exceeding benefits by about $302 million each year).⁵⁴,⁵⁵

Ages and Ages Hence: What is Ahead for CON?

The American healthcare system has evolved significantly since CON laws were first introduced in the 1960s. As the system has changed, debates have emerged about how well CON laws continue to achieve their original goals of promoting access to care, ensuring equitable distribution of services, and managing healthcare costs. Assessing the current impact of CON laws is complex, and policymakers often face differing interpretations of the available evidence.

State leaders considering changes to CON policies have several potential pathways. Comparative studies examining states with and without CON requirements offer varied findings on access, quality, cost, and financial performance, leading some observers to view full repeal as one possible option. At the same time, states that seek to retain aspects of CON—such as aligning service supply with community need or preventing oversaturation of particular facilities—may consider more incremental reforms aimed at improving the efficiency, transparency, or scope of the process.

The following section outlines a range of reform approaches, along with examples of how states in the CSG South region have modified their CON policies.

Exemptions

Exemptions to a state’s CON program would allow the state to address areas of limited access to particular healthcare services and respond to concerns raised by stakeholders about potential cost pressures within CON-regulated markets. Exemptions to a state’s CON program would allow the state to address areas of limited access to particular healthcare services and respond to concerns raised by stakeholders about potential cost pressures within CON-regulated markets. This could involve exempting CON requirements for specialized services, facilities in rural and underserved communities, or equipment replacements. An exemption might also entail raising or removing cost threshold requirements for capital projects.

Georgia passed House Bill 1339 (2024) in April 2024, which provided CON exemptions for ambulatory service centers (ASCs) and other projects, such as facility renovations and repairs of imaging equipment,⁵⁶ regardless of cost. The law also removed the $10 million capital expenditure threshold for hospital projects, introduced new exemptions for rural hospitals, and adjusted the administrative process for applications and appeals.⁵⁷

Other states have enacted exemptions for specialized care, particularly for care areas where studies have identified disparities. During the 2025 session, Kentucky expanded its CON exemptions through House Bill 90. Freestanding birthing centers are now exempt. Oklahoma enacted Senate Bill 873 that exempts University hospitals in an attempt to aid in training and specialized care.

Phased Repeal

This reform method involves gradually reducing CON requirements over a set period of time rather than removing them all at once. Under this approach, states make incremental adjustments to the scope or application of CON regulations. Supporters of phased reform note by spreading the regulatory change.

Several states have opted for a phase-out approach. In 2019, Florida (House Bill 21) repealed most of its CON requirements, and two years later, it phased out CONs for hospitals. Currently, Florida only requires CONs for specific long-term care facilities (nursing homes, hospices, and intermediate care facilities for individuals with developmental disabilities).⁵⁸

Similarly, North Carolina and South Carolina enacted phased repeals in 2023. North Carolina (House Bill 76) separated its repeal plan into three phases, two of which were based on Healthcare Access and Stabilization Program (HASP) payment (which enables hospitals to pay for the non-federal share costs of Medicaid expansion).⁵⁹ Phase one of the repeals was implemented upon the bill‘s effectiveness date. Phases two and three are to be implemented two and three years after the first HASP payment, respectively. The bill immediately revised the definition of ”health service facility” to no longer include psychiatric facilities, chemical dependency treatment facilities, and chemical dependency treatment beds, intended to increase and ease access to mental healthcare resources. South Carolina enacted reforms through Senate Bill 164. This bill eliminated 16 CON requirements upon enactment and began the process to phase out its hospital CON requirement over the course of three years. As a result, the South Carolina CON program will ultimately be limited to nursing facilities

Reforming the CON Process

Apart from repealing which facilities and services require CON approval, states have adjusted their CON programs through the administrative process. Reforms such as streamlining the application process, narrowing the geographic scope of analysis, and reducing application fees are process-focused reforms that states have used to refine program operations while maintaining CONs ability to measure and define healthcare needs.⁶¹

Application

The application, review, and approval process can involve substantial time and administrative steps. Some states have explored streamlining elements of this process to make it more efficient, particularly for smaller providers or for projects that typically receive limited opposition. Virginia’s Senate Bill 277 (2024) created a task force to determine how to expedite the CON review process for generally uncontested projects with limited planning impacts. Many of the projects listed for review focused on the provision of psychiatric care. The State Health Services Plan Task Force found and reported that several services and facilities are recommended for inclusion in an expedited review process, including, but not limited to, adding beds to pre-established psychiatric facilities, adding hospital beds through relocation, and establishing a cardiac catheterization lab in an existing hospital with cardiac catheterization services.⁶²

Geographic Scope

Many CON programs evaluate the need for new facilities based on broad regional service areas. Some analysts note that this approach may not fully capture localized differences in demand, particularly in rural communities, where residents may travel longer distances for certain types of care. In response to these concerns, states such as Alabama, Kentucky, and Tennessee have adopted exemptions for rural hospitals. These exemptions aim to provide greater flexibility for facility development in underserved areas.

By applying review criteria to smaller geographic regions, some states seek to refine how need is assessed and to better align facility planning with local healthcare utilization patterns.

Fees

CON application fees are generally intended to offset the administrative and legal costs associated with evaluating applications. The review process can involve significant staff time and procedural steps. Application fees vary across states based on individual laws and the number of facilities and services requiring a CON. For instance, Alabama’s minimum fee is 0.1 percent of the proposed project until $12,000⁶⁴, while Tennessee’s minimum is $3,000 and the maximum is $45,000⁶⁵. Some states have explored options such as waivers or adjustments to capital expenditure thresholds to modify application costs. Some policymakers view these approaches as a way to provide additional flexibility for smaller providers or those operating in underserved markets.

Value-Based Reimbursement (VBR)

Value-based reimbursement (VBR) is a care delivery and repayment structure built with five goals in mind, according to the American Medical Association: provide the best patient experience, advance health equity, improve patients’ health outcomes, support the well-being of the healthcare workforce, and deliver healthcare services at a reasonable cost. VBR models link payment to measures such as quality, equity, and patient outcomes rather than the volume of services delivered. Supporters of VBR note that these models are intended to encourage high-quality and cost-effective care⁶⁶.

Critics of CON laws argue that limiting the supply of healthcare services can contribute to less competitive market conditions. According to this viewpoint, VBR may offset some of those concerns by tying reimbursement to performance measures that encourage providers to compete on quality. While VBR does not alter the number of providers in the market, some analysts suggest that implementing VBR alongside CON may influence market competition.

As of 2019, 46 states (including 12 in the CSG South region) and the District of Columbia have a VBR program⁶⁷. Additionally, this method is gaining traction internationally, with the United Kingdom, Sweden, and Australia each implementing VBR elements within their respective healthcare systems⁶⁸.

VBR systems differ in implementation, but the general principle of how each state decides to implement it remains. The principle of realigning incentives through alternative payment models remains the same. VBR has been used in various types of care, including accountable care organizations, maternal and child healthcare, long-term care, behavioral health, and community health⁶⁹.

Conclusion

CON laws were designed to improve healthcare access and affordability. They emerged in the United States in the 1960s to address concerns about the distribution of services, particularly in rural areas, and to mitigate rising healthcare costs due to excessive spending. Although widely adopted at the time, the effectiveness of these laws has remained a topic of ongoing discussion and periodic legislative review across states. Perspectives on CON’s impact vary depending on how the laws’ goals are interpreted and how they are viewed within the broader healthcare regulatory landscape.

States may be at a crossroads regarding CON laws as healthcare continues to evolve. For state policymakers looking to reform long-standing CON laws, four approaches have been implemented in various states: exemptions, phased repeals, process reforms, and reenvisioning the repayment structure. These options reflect different strategies for modifying CON requirements while maintaining some form of oversight or assessment mechanism. Determining whether to retain, adjust, or replace elements of CON will require policymakers to assess their state’s healthcare market, including population, proportion of healthcare costs covered by the government, and geographic need.

Appendix

CON Laws in the CSG South Region (As of November 2025)

Alabama
Certificate of Need Law	Ala. Code § 22-21-260
Recently Passed Legislation	N/A
Regulated Facilities	• General hospitals • Specialized hospitals: -Tuberculosis -Psychiatric -Long-term care -Related facilities associated with a hospital >Laboratories >Outpatient clinics >Central service facilities • Skilled nursing facilities • Intermediate care facilities • Skilled or intermediate care units in veteran nursing homes and veteran homes • Rehabilitation centers • Public health centers • Facilities for surgical treatment that do not require hospitalization • Kidney disease treatment centers: Freestanding hemodialysis units• Community mental health centers • Alcohol and drug abuse facilities • Facilities for the developmentally disabled • Hospice service providers • Home health agencies • Health maintenance organizations
Regulated Activities	• Constructing, developing, acquiring, or establishing a new healthcare facility or HMO • Selling, leasing, or other transfer/change in control if involving one or more institutional health services • Capital expenditures greater than: -$2,000,000 for major medical equipment; -$800,000 for new annual operating costs; -$4,000,000 for any other capital expenditures • Changing bed capacity • Offering new health services • Replacing or relocating an existing acute care hospital with a new digital hospital under certain circumstances

Arkansas
Certificate of Need Law	A.C.A § 20-8-101; et seq
Recently Passed Legislation	AR HB 1653 (2025)
Regulated Facilities	• Any healthcare facilities costing $1 million and over • Nursing home facilities • Residential care facilities • Assisted living facilities • Post-acute head injury retraining facilities • Residential care facilities • Other long-term medical care or personal care facilities • Home health care services agencies
Regulated Activities	• Constructing a nursing home • Adding new long-term care beds or expanding existing long-term care beds • Adding or expanding home health services • Creating hospice programs• Moving long-term care beds from one site to another • Moving a site location for an approved project • Transferring a permit of approval, legal title, or right of ownership

Florida
Certificate of Need Law	Fla. Stat. § 408.031 et seq.
Recently Passed Legislation	FL HB 797 (2025) FL HB 21 (2019)
Regulated Facilities	• Skilled nursing facilities • Hospices • Intermediate care facilities for the intellectually and developmentally disabled
Regulated Activities	• Adding beds to community nursing homes or intermediate care facilities for the intellectually and developmentally disabled • Constructing or establishing additional health care facilities, except for a replacement health care facility when the proposed project site is located on the same site as or within 1 mile of the existing health care facility • Converting from one type of health facility to another• Establishing a hospice or hospice inpatient facility

Georgia
Certificate of Need Law	Ga. Code § 31-6-40 et seq.
Recently Passed Legislation	GA HB 1339 (2024) GA HB 186 (2019)
Regulated Facilities	• New, expanded, or relocated health care facilities • Acute care hospitals• Destination cancer hospitals • Special care units • Skilled nursing facilities • Intermediate care facilities • Personal care homes • Ambulatory surgical facilities • Obstetrical facilities • Free-standing emergency departments (other facilities not on a hospital’s primary campus) • Health maintenance organizations• Home health agencies • Diagnostic, treatment, and rehabilitation centers
Regulated Activities	• Purchase or lease of diagnostic equipment • Increase of bed capacity • Clinical services not usually offered by a healthcare facility:– Radiation therapy– Biliary lithotripsy– Surgery in an operating room environment (including ambulatory surgery)– Cardiac catheterization • Converting a destination cancer hospital to a general cancer hospital • Capital expenditures costing more than $10 million • Increasing bed capacity • Converting a general acute care hospital to a specialty hospital

Kentucky
Certificate of Need Law	Ky. Rev. Stat. § 216B.020 et seq.
Recently Passed Legislation	KY HB 90 (2025) KY SB 280 (2024) KY HB 777 (2024)
Regulated Facilities	• Psychiatric hospitals • Physical rehabilitation hospitals • Chemical dependency programs • Nursing facilities • Nursing homes • Personal care homes • Intermediate care facilities • Family care homes • Outpatient clinics • Ambulatory care facilities • Ambulatory surgical centers • Freestanding birthing centers with more than four beds • Emergency care centers and services• Ambulance providers
Regulated Activities	• Establishing a health facility • Obligating a capital expenditure which exceed the capital expenditure minimum • Making a substantial change in the bed capacity of a health facility • Making a substantial change in a health service • Making a substantial change in a project• Acquiring major medical equipment • Altering a geographical area or altering a specific location which has been designated on a previously granted certificate of need or license • Transferring an approved certificate of need for establishing a new health facility or replacing a licensed facility

Louisiana
Certificate of Need Law	LA Rev Stat § 40:2116
Recently Passed Legislation	LA SB 30 (2022)
Regulated Facilities	• Hospice • Nursing facilities • Home and community based services • Intermediate care facilities for people with intellectual and developmental disabilities • Behavioral health providers that provide psychosocial rehabilitation or community psychiatric support and treatment services • Opioid treatment programs
Regulated Activities	• Licensing additional units, providers, or facilities • Changing providers participating in the Medicaid program

Mississippi
Certificate of Need Law	MS Code Ann. § 41-7-171 et. seq
Recently Passed Legislation	MS SB 2820 (2022)
Regulated Facilities	• Hospitals • Psychiatric hospitals • Skilled nursing facilities • Chemical/substance dependency hospitals • End-stage renal disease facilities, including free-standing hemodialysis units • Intermediate care facilities • Ambulatory care facilities • Intermediate care facilities for intellectually disabled • Home health agencies • Psychiatric residential treatment facilities • Pediatric skilled nursing facilities• Long-term care hospitals • Comprehensive medical rehabilitation facilities
Regulated Activities	• Constructing, developing, or establishing a new health care facility • Relocating a health facility • Relocating major medical equipment to a site more than a mile away • Changing bed complement • Offering covered services not offered in the previous 12 months • Relocating health services from one facility to another that is more than a mile away • Acquiring major medical equipment • Changing ownership of existing health care facilities

Missouri
Certificate of Need Law	MO Rev Stat § 197.300 et. seq
Recently Passed Legislation	N/A
Regulated Facilities	• Hospitals • Residential care facilities • Assisted living facilities • Intermediate care facilities• Skilled nursing facilities • Long-term care beds in a hospital • Long-term care hospitals
Regulated Activities	• Developing a new health care facility • Acquiring any health care facility or major medical equipment • Capital expenditures by or on behalf of a health care facility • Pre-development activities costing more than $150,000 • Changing the licensed bed capacity of a health care facility by more than 10 beds or more than 10 percent of that total capacity, whichever is less, over a two-year period • Offering a new health service that was not offered in the previous 12 months (excluding home health services) • Relocating licensed beds among major types of services or reallocating licensed beds from one facility to another by more than 10 beds or 10 percent of the total licensed bed capacity, whichever is less

North Carolina
Certificate of Need Law	NC Gen. Stat. § 131E-175 et seq
Recently Passed Legislation	NC HB 76 (2023) NC HB 259 (2023) NC SB 115 (2023) NC SB 462 (2021)
Regulated Facilities	• Hospitals • Hospice facilities • Home health agency offices • Ambulatory surgical facilities • Long-term care hospitals • Psychiatric facilities • Rehabilitation facilities • Adult care homes • Kidney disease treatment centers, including free-standing hemodialysis units

Oklahoma
Certificate of Need Law	63 OK Stat § 1-851 et seq
Recently Passed Legislation	OK SB 873 (2025) OK HB 2330 (2024) OK HB 3867 (2022)
Regulated Facilities	• Long-term care facilities– Nursing facilities– Special care facilities • Specialized facilities for individuals with intellectual and developmental disabilities • Hospital-based skilled nursing units
Regulated Activities	• Establishing a new facility • Expanding an existing facility • Acquiring an existing facility • Capital expenditures exceeding $1,000,000 • Increasing the number of licensed beds in an existing facility

South Carolina
Certificate of Need Law	SC Code § 44-7-110 et seq
Recently Passed Legislation	SC SB 858 (2024) SC SB 164 (2023)
Regulated Facilities	• Nursing homes • Hospitals
Regulated Activities	• Establishing a new facility • Increasing the number of beds or changing the licensure for a bed in a facility • Capital expenditures exceeding $5,000,000 • Offering new services that have not been offered in the prior 12 months • Acquiring nursing home medical equipment that exceeds the regulated total project cost allowance

Tennessee
Certificate of Need Law	TN Code § 68-11-1602 et seq
Recently Passed Legislation	TN SB 515 (2025) TN HB 2269 (2024) TN SB 267 (2023) TN HB 948 (2021)
Regulated Facilities	• Nursing homes • Hospitals • Ambulatory surgical treatment centers • Intellectual disability institutional habilitation facilities (certain public non-facility beds are exempt) • Home care organizations • Outpatient diagnostic centers • Rehabilitation facilities • Residential hospices • Nonresidential substitution-based treatment centers for opiate addiction
Regulated Activities	• Construction, development, or establishment of a healthcare institution• Changing the bed capacity/complement • Initiating any of the following services: Burn unit, Neonatal intensive care unit, Open heart surgery, Organ transplantation, Cardiac catheterization, Linear accelerator, Home health, Hospice, Opiate addiction treatment (non-residential) • Relocation of existing or certified facilities • MRI and PET scans in lower population areas (repeal effective December 2025) • Establishment of satellite emergency department or inpatient facilities by a hospital at a location other than the hospital’s main campus

Texas
Certificate of Need Law	N/A
Recently Passed Legislation	N/A
Regulated Facilities	N/A
Regulated Activities	N/A

Virginia
Certificate of Need Law	VA Code § 32.1-102.1 et seq
Recently Passed Legislation	VA SB 277 (2024) VA SB 1452 (2023) VA SB 130 (2022) VA SB 279 (2020) VA HB 1870 (2019)
Regulated Facilities	• Hospitals • General hospitals • Sanitariums • Nursing homes • Intermediate care facilities • Extended care facilities • Mental hospitals • Facilities for individuals with developmental disabilities • Psychiatric hospitals and intermediate care facilities for individuals with substance abuse • Specialized centers, clinics, or physicians’ offices developed for the provision of: Ambulatory surgery, Cardiac catheterization, CT scanning, Stereotactic radiosurgery, Lithotripsy, MRI, MSI, PET scanning, Radiation therapy, Stereotactic radiotherapy, Proton beam therapy, Nuclear medicine imaging, Other specialty services • Rehabilitation hospitals
Regulated Activities	• Establishing a medical care facility • Increasing the total number of beds • Increasing the number of operating rooms • Relocating beds from an existing facility • Providing new nursing home services not offered during the past 12 months • Introducing new medical equipment • Hospital capital expenditures of $5 million or more • Capital expenditures of $15 million or more by a non-hospital facility

West Virginia
Certificate of Need Law	WV Code §16-2D-2 et seq.
Recently Passed Legislation	WV SB 2028 (2024) WV SB 613 (2023) WV HB 4108 (2020)
Regulated Facilities	• Public or private facility, agency, or entity that offers or provides health services, whether for-profit or nonprofit, and whether licensed or required to be licensed, in whole or in part
Regulated Activities	• Construction, development, acquisition, or other establishment of a healthcare facility • Partial or total closure of a healthcare facility with which capital expenditure is associated • Obligation of capital expenditure incurred by or on behalf of a healthcare facility in excess of the expenditure minimum • Obligation for a capital expenditure incurred by a person to acquire a healthcare facility • Substantial change to the bed capacity • Substantial change in previously approved health service – Includes addition of services not offered in the prior 12 months • Elimination of a health service previously offered on a regular basis • Certain services, regardless of expenditure: Providing radiation therapy, computed tomography, positron emission tomography, cardiac surgery, fixed magnetic resonance imaging, comprehensive medical rehabilitation; Establishing an ambulatory care center or ambulatory surgical center; Providing diagnostic imaging

End Notes

1. “Certificate of Need (CON).” n.d. Georgia Department of Community Health. https://dch.georgia.gov/divisionsoffices/office-health-planning/certificate-need-con.
2. Melhado, Evan M. 2006. “Health Planning in the United States and the Decline of Public-Interest Policymaking.” The Milbank Quarterly 84 (2): 359–440. https://doi.org/10.1111/j.1468-0009.2006.00451.x.
3. Ollerton, Alexander, and Christopher Koopman. 2023. “How Can Certificate-of-Need Laws Be Reformed to Improve Access to Healthcare?” The Center for Growth and Opportunity, August. https://www.thecgo.org/books/regulation-and-economic-opportunity-blueprints-for-reform/how-can-certificate-of-need-laws-be-reformed-to-improve-access-to-healthcare/.
4. “$100 in 1974 – 2025 | Inflation Calculator.” 2025. Officialdata.org. https://www.officialdata.org/1974-dollars-in-2025?amount=100.
5. Simpson, James B. 1986. “Full Circle: The Return of Certificate of Need Regulation of Health Facilities to State Control.” Indiana Law Review 19 (4): 1025–1127.
6. Schneiter, Johanna Butler, Trish Riley, Ellen. 2020. “Should We Re-Invent State Health Planning and Certificate-of-Need Programs?” NASHP. June 29, 2020. https://nashp.org/should-we-re-invent-state-health-planning-and-certificate-of-need-programs/.
7. Blum, John D., Ann Damsgaard, and Paul R. Sullivan. “Cost-Benefit Analysis.” Proceedings of the Academy of Political Science 33, no. 4 (1980): 137–47. https://doi.org/10.2307/1173862.
8. Schneiter, Johanna Butler, Trish Riley, Ellen. 2020. “Should We Re-Invent State Health Planning and Certificate-of-Need Programs?” NASHP. June 29, 2020. https://nashp.org/should-we-re-invent-state-health-planning-and-certificate-of-need-programs/.
9. Simpson, James B. 1986. “Full Circle: The Return of Certificate of Need Regulation of Health Facilities to State Control.” Indiana Law Review 19 (4): 1025–1127.
10. Mitchell, Matthew D. 2024. “Certificate of Need Laws in Health Care: Past, Present, and Future.” Inquiry 61 (January). https://doi.org/10.1177/00469580241251937.
11. FL. Stat. § 408.039 (2025).
12. S.C. Code § 44-7-110 to § 44-7-230.
13. Rovinsky, Michael. 2024. “Understanding Certificate of Need (CON) in Healthcare | CHAP.” CHAP. July 10, 2024. https://chapinc.org/blog-news/understanding-certificate-of-need/.
14. Lanning, Joyce A., Michael A. Morrisey, and Robert L. Ohsfeldt. 1991. “Endogenous Hospital Regulation and Its Effects on Hospital and Non-Hospital Expenditures.” 3 (2): 137–54. https://doi.org/10.1007/bf00140955.
15. “Certificate of Need Laws in Louisiana – Institute for Justice.” 2023. Institute for Justice. June 8, 2023. https://ij.org/report/conning-the-competition/state-profile/louisiana/.
16. RPC. 2024. “Data for Certificate of Need Applications.” Research and Planning Consultants, LP. March 19, 2024. https://rpcconsulting.com/useful-data-sources-for-con-applications/.
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18. Certificate of Need Modernization: Hearing on GA HR 603. Before the House Study Committee on Certificate of Need Modernization. Georgia’s 157th General Assembly (September 12, 2023). Testimony of Christopher Dorman, CEO and President of Southwell Medical System.
19. Certificate of Need Modernization: Hearing on GA HR 603. Before the House Study Committee on Certificate of Need Modernization. Georgia’s 157th General Assembly (August 1, 2023). Testimony of Anna Adams, Chief Government Relations Officer at the Georgia Hospital Association.
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30. U.S. Government Accountability Office. 2023. “Why Health Care Is Harder to Access in Rural America.” U.S. Government Accountability Office. May 16, 2023. https://www.gao.gov/blog/why-health-care-harder-access-rural-america.
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38. Cutler, DM, Huckman, RS, Kolstad, JT. 2010. “Input Constraints and the Efficiency of Entry: Lessons from Cardiac Surgery.” Am Econ J Econ Policy. 2(1):51–76.
39. Agency, Florida. 2025. “Certificate of Need (CON) Applications.” Myflorida.com. https://ahca.myflorida.com/health-quality-assurance/bureau-of-health-facility-regulation/certificate-of-need-and-commercial-managed-care-unit/certificate-of-need-con-program-overview/certificate-of-need-competitive-review-batching-cycles-2025/certificate-of-need-con-applications.
40. “Certificate of Need (CON).” n.d. Georgia Department of Community Health. https://dch.georgia.gov/divisionsoffices/office-health-planning/certificate-need-con.
41. “Review of FY 2024: Year in Review.” n.d. Missouri Department of Health and Senior Services. Accessed October 17, 2025.
42. “NC DHSR HPCON: Decisions and Findings.” 2024. Ncdhhs.gov. https://info.ncdhhs.gov/dhsr/coneed/decisions/archive2024.html.
43. “Review of Archived C.O.N. Applications.” n.d. South Carolina Department of Health. Accessed October 17, 2025.
44. “Case Decisions – Licensure and Certification.” 2019. Virginia.gov. https://www.vdh.virginia.gov/licensure-and-certification/the-certificate-of-public-need-program/case-decisions/.
45. kffcarenec. 2025. “10 Things to Know about Medicaid | KFF.” KFF. February 18, 2025. https://www.kff.org/medicaid/10-things-to-know-about-medicaid/.
46. Stratmann, Thomas, and Matthew Baker. 2020. “Examining Certificate-of-Need Laws in the Context of the Rural Health Crisis.” SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3667311.
47. Noether, Monica. 1988. “Competition among Hospitals.” Journal of Health Economics 7 (3): 259–84. https://doi.org/10.1016/0167-6296(88)90028-8.
48. Anderson, Keith B. 1989. “Regulation, Market Structure, and Hospital Costs: A Comment on the Work of Mayo and McFarland.” Bureau of Economics Federal Trade Commission. May 1989. https://www.ftc.gov/reports/regulation-market-structure-hospital-costs-comment-work-mayo-mcfarland.
49. Custer, William S., Patricia Ketsche, Bernette Sherman, Glenn M. Landers, Mei Zhou, Dawud Ujamaa, and Karen J. Minyard. 2006. Review of Report of Data Analyses to the Georgia Commission on the Efficacy of the CON Program.
50. Mitchell, Matthew D. 2024. “Certificate of Need Laws in Health Care: Past, Present, and Future.” Inquiry 61 (January). https://doi.org/10.1177/00469580241251937.
51. KFF. 2025. “Status of State Medicaid Expansion Decisions | KFF.” KFF. May 9, 2025. https://www.kff.org/medicaid/status-of-state-medicaid-expansion-decisions/.
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57. “Why the ‘CON’ Law Repeal Is Groundbreaking for Florida Hospitals.” 2019. Buchanan Ingersoll & Rooney PC. July 3, 2019. https://www.bipc.com/why-the-con-law-repeal-is-groundbreaking-for-florida-hospitals.
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59. South Carolina’s CON for hospitals will sunset on January 1, 2027. S.C. Code § 44-7-160(C).
60. “Phasing out Certificate-of-Need Laws: A Menu of Options.” 2020. Mercatus Center. February 25, 2020. https://www.mercatus.org/research/policy-briefs/phasing-out-certificate-need-laws-menu-options.
61. Health, Board of, and Department of Health. 2024. “RD883 (Published 2024) – Recommendations of the State Health Services Plan Task Force – December 3, 2024.” Virginia.gov. https://rga.lis.virginia.gov/Published/2024/RD883.
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63. Schmidt, Rachel. 2025. “Alabama Certificate of Need Requirements: Facility Guide.” IntelyCare. May 28, 2025. https://www.intelycare.com/facilities/resources/alabama-certificate-of-need-requirements-facility-guide/.
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