Certificate of Need (CON) Application Consulting
Last updated: April 2026
35 states plus the District of Columbia require Certificate of Need approval before a hospital, ambulatory surgery center, home health agency, hospice, skilled nursing facility, or diagnostic imaging center can expand, open, or acquire equipment above cost thresholds. Contested CON applications typically cost $150,000 to $350,000 in external consulting and legal fees — and a denied application resets the clock entirely. IHS guides healthcare organizations through CON applications in all active jurisdictions, from Letter of Intent through contested hearing, with particular expertise in combined CON plus accreditation workflows for home health and hospice operators.
What Is a Certificate of Need and Why Does It Matter?
A Certificate of Need (CON) is a state regulatory approval required before certain healthcare organizations can establish, expand, or acquire capital equipment above defined cost thresholds. CON laws were designed to prevent overbuilding of healthcare capacity and duplicate services — preventing healthcare facilities from expanding into markets where demand does not justify the investment.
CON laws were federally mandated by the National Health Planning and Resources Development Act of 1974. The federal mandate was repealed in 1986 after evidence emerged that CON programs created local monopolies without effectively controlling costs. However, state programs remain deeply entrenched in 35 states plus DC — and because the legislative reform trend is toward partial deregulation rather than wholesale repeal, real-time state intelligence is essential before any expansion project is committed.
What Projects Trigger CON Review?
CON-triggering projects vary by state, but the most common triggers include:
- New healthcare facility construction — hospitals, ASCs, SNFs, LTACHs, IRFs
- Facility acquisitions and ownership transfers — particularly in Connecticut, which requires CON approval for hospital ownership changes
- Bed additions — acute care hospital beds, long-term care beds, psychiatric beds
- New service lines — open heart surgery, organ transplant, radiation therapy, neonatal intensive care
- Major medical equipment acquisitions — MRI scanners, PET scanners, linear accelerators, and equipment above state-defined cost thresholds (Iowa: $1.5M and above, updated July 2025)
- New home health agency or hospice licenses — in North Carolina, new agencies require SMFP approval before any licensure or accreditation application can proceed
- Service terminations — Connecticut requires CON for termination of certain hospital services
Which States Require a CON?
As of 2026, the following states maintain active CON programs (scope and thresholds vary by state; partial programs noted):
| State | CON Status | Key Scope Notes |
|---|---|---|
| Alabama | Active | Hospitals, nursing homes, major medical equipment, ASCs |
| Alaska | Active (Limited) | Nursing homes, psychiatric, certain facilities |
| Arkansas | Active | Hospitals, long-term care, home health |
| Connecticut | Active | Hospitals, scanners, ownership transfers, service terminations |
| District of Columbia | Active | Broad coverage of healthcare services and facilities |
| Florida | Partial (2019) | Nursing homes and hospices only after 2019 partial repeal |
| Georgia | Active | Hospitals, nursing homes, equipment — modified by HB 1339 (2024) |
| Hawaii | Active | Broad coverage |
| Illinois | Active | Hospitals, LTC, dialysis, ASCs, freestanding EDs |
| Indiana | Partial | Nursing homes only (reinstated) |
| Iowa | Active | Hospitals, nursing facilities, ASCs, equipment over $1.5M — updated July 2025 |
| Kentucky | Active | Broad regulation |
| Maryland | Active | Highly granular — detailed statistical applications required |
| New York | Active | Updated August 2025 with new requirements |
| North Carolina | Active | Highly restrictive — new home health/hospice requires SMFP before licensure/accreditation |
Additional active CON states not listed include Delaware, Kentucky, Maine, Mississippi, Montana, Nevada, New Hampshire, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, Washington, and West Virginia. 15 states have no CON requirements. IHS maintains current state-by-state intelligence including 2024–2025 legislative changes.
The CON Application Process: Step by Step
CON applications follow a structured process established by each state's health planning agency, but the strategic elements are consistent across jurisdictions. The determinative element in most CON reviews is the need analysis — demonstrating that the proposed project addresses a documented gap in service availability in the proposed service area.
Step 1 — Pre-Application Strategy
Before filing a Letter of Intent, IHS conducts a CON threshold analysis to confirm whether your project triggers review under applicable state law, identifies the review criteria your application must satisfy, and assesses the competitive landscape for potential incumbent opposition. In states where incumbent hospitals routinely oppose competing ASC applications — the most common form of strategic CON blocking — pre-application competitive intelligence determines whether a strong need analysis can prevail or whether alternative project structures can avoid the contested application track entirely.
Step 2 — Letter of Intent (LOI)
Most CON states require a Letter of Intent filed within a defined window before the application. The LOI establishes the project scope and triggers the competing applicant period. IHS drafts LOIs that accurately characterize your project while preserving flexibility for the detailed application and avoiding characterizations that could limit your options in a comparative review.
Step 3 — Application Preparation
The CON application is the substantive work of the engagement. Core components include:
- Need Analysis — Demographic modeling demonstrating unmet demand in the proposed service area. This is the determinative element. Need analysis draws on census data, population health indicators, utilization projections, current provider capacity, and state health plan benchmarks. IHS builds need analyses that can withstand comparative review by incumbent opponents.
- Financial Projections — Pro forma income statements, balance sheets, and cash flow projections demonstrating financial viability over the project's useful life.
- Facility Plans — Physical plant descriptions, architectural plans (for construction projects), equipment specifications, and site selection rationale.
- Staffing Model — Licensed and credentialed staffing plans demonstrating operational feasibility and compliance with state licensure requirements.
- Quality Assurance Plan — For home health and hospice CON applications, quality assurance documentation must demonstrate compliance with accreditation standards (CHAP, ACHC) in states that tie CON approval to accreditation readiness.
Step 4 — Competing Applicant Period and Public Hearing
After LOI filing, CON states open a window during which other organizations can file competing applications for the same project type and service area. Incumbent hospitals are the most frequent competing applicants for ASC projects — they file competing applications primarily as a delay and cost-escalation strategy rather than to actually build a competing facility. IHS develops counter-strategy for contested applications: building the strongest possible independent need analysis, preparing written responses to competing applications, and preparing public hearing testimony that directly addresses the comparative review criteria the state agency will apply.
Step 5 — State Agency Review and Decision
The reviewing agency conducts its analysis under applicable CON review criteria — typically: community need, financial feasibility, service quality, workforce availability, and consistency with the state health plan. Review periods range from 60 days to 12 months depending on state and complexity. IHS coordinates with agency staff throughout the review period, responds to agency information requests, and prepares for contingencies including conditional approval with compliance conditions.
Step 6 — Post-Decision: Implementation Tracking and Appeal
Approved CONs typically include conditions and implementation milestones. IHS monitors compliance with CON conditions and prepares required progress reports. For denied applications, IHS prepares administrative appeal documentation and coordinates with state-licensed counsel for hearing representation. Thomas G. Goddard, JD, PhD provides regulatory legal analysis of denial grounds and appeal strategy.
How IHS Supports CON Applications
IHS is positioned for healthcare organizations that face both CON requirements and accreditation obligations simultaneously — the combination that pure CON legal firms cannot address. This is most pronounced for home health and hospice operators in North Carolina, where new agency development requires SMFP (CON) approval before licensure proceeds, and CHAP or ACHC accreditation before Medicare certification can be obtained. Managing both workflows sequentially without understanding the dependencies adds months to project timelines and risks CON approval without accreditation readiness (or vice versa).
IHS designs the combined CON plus accreditation timeline so that both tracks advance in parallel, with interdependencies managed to prevent one approval from sitting idle while the other catches up.
IHS CON Consulting Capabilities
- Multi-State CON Intelligence — Real-time state-by-state CON threshold analysis for PE-backed operators building multi-site platforms requiring sequential CON filings across multiple jurisdictions.
- Need Analysis Development — Demographic modeling, utilization projections, and community need documentation that withstands comparative review by state agencies and competing applicants.
- Contested Application Strategy — Pre-application competitive intelligence, competing application response, and public hearing preparation for ASC and other projects that attract incumbent hospital opposition.
- 2024–2025 Legislative Change Analysis — Georgia HB 1339, Iowa July 2025 threshold updates, and New York August 2025 requirements analyzed for implications to planned projects.
- North Carolina Combined CON + Accreditation — SMFP approval process integrated with CHAP or ACHC accreditation timeline for new home health and hospice entrants.
- Appeal Support — Regulatory legal analysis of CON denial grounds and administrative appeal strategy, coordinated with state-licensed hearing counsel.
See also: Complete CON Application FAQ | CON Application Case Study
Frequently Asked Questions
What is the most common reason CON applications are denied?
Insufficient demonstrated need in the proposed service area is the most common CON denial ground. States evaluate need using health planning benchmarks — bed-to-population ratios, utilization rates, geographic access gaps, and state health plan projections. Applications that project demand without grounding projections in documented demographic trends or that rely on optimistic utilization assumptions that conflict with state health plan data are most vulnerable to denial. IHS builds need analyses that directly address the applicable state's review criteria, using the same data sources and methodology that state agencies use in their own evaluations.
Can a CON be transferred if I sell my healthcare facility?
CON transferability varies by state. Most states allow CONs to transfer with facility ownership subject to review and approval of the change of ownership. In Connecticut, hospital ownership transfers independently trigger CON review — requiring a new CON application for the transaction itself. In North Carolina, changes in the controlling ownership of a CON-approved facility must be reported to the state and may trigger review depending on the nature and magnitude of the change. IHS analyzes CON transferability implications before any acquisition or divestiture transaction involving CON-approved facilities in active CON states.
Does a CON guarantee I can open my facility?
A CON is a necessary but not sufficient condition for opening in CON states. CON approval authorizes the project but does not substitute for licensure, accreditation, Medicare certification, zoning approvals, or construction permits. IHS tracks the full regulatory pathway from CON approval through operational readiness, ensuring that each subsequent regulatory step is initiated at the right point in the project timeline rather than discovering dependencies after CON approval is in hand.
How does the aging population affect CON demand over the next decade?
The US population aged 65 and older is projected to grow 32% over the next decade — driving sustained demand for long-term care beds, memory care capacity, hospice services, home health programs, and post-acute rehabilitation facilities. In CON states, this demographic shift is not sufficient on its own to guarantee approval — need analyses must demonstrate that the projected growth is not already served by existing licensed capacity in the proposed service area. IHS builds need analyses that capture both the macro demographic trend and the local capacity gap, which is the combination that satisfies state reviewers.
Ready to File Your CON Application?
Certificate of Need applications are high-stakes regulatory proceedings where a failed application costs $150,000 to $350,000 and resets your project timeline by 12–18 months. IHS builds CON applications that can withstand comparative review and incumbent opposition — with particular expertise in combined CON plus accreditation workflows for home health and hospice operators in North Carolina and other CON states.
Schedule a CON strategy consultation. We will assess your project against applicable state CON requirements, identify the competitive landscape, and give you a realistic timeline and cost estimate for the full application process.