Certificate of Need (CON) Application — Frequently Asked Questions

What is a Certificate of Need (CON) in healthcare?

A Certificate of Need (CON) is a state regulatory approval required before certain healthcare organizations can establish new facilities, expand services, or acquire capital equipment above defined cost thresholds. CON laws require applicants to demonstrate that a proposed project meets a documented community need before the state approves it.

CON laws were federally mandated in 1974 and the federal mandate was repealed in 1986. Despite repeal, state programs remain entrenched: 35 states plus DC maintain active CON programs as of 2026, and piecemeal legislative reform rather than wholesale deregulation is the dominant trend. The estimated annual market for CON application consulting and legal defense is $250 million to $450 million.

Which states require a Certificate of Need?

35 states plus the District of Columbia maintain active CON programs as of 2026:

State	Status	Key Notes
Alabama	Active	Hospitals, nursing homes, equipment, ASCs
Alaska	Active (Limited)	Nursing homes, psychiatric, select facilities
Arkansas	Active	Hospitals, long-term care, home health
Connecticut	Active	Hospitals, scanners, ownership transfers, service terminations
DC	Active	Broad coverage
Florida	Partial	Nursing homes and hospices only (2019 partial repeal)
Georgia	Active	Modified by HB 1339 (2024)
Hawaii	Active	Broad coverage
Illinois	Active	Hospitals, LTC, dialysis, ASCs, freestanding EDs
Indiana	Partial	Nursing homes only
Iowa	Active	Equipment over $1.5M — updated July 2025
Kentucky	Active	Broad regulation
Maryland	Active	Highly granular statistical applications
New York	Active	Updated August 2025
North Carolina	Active	New home health/hospice requires SMFP before licensure

Additional active states: Delaware, Maine, Mississippi, Montana, Nevada, New Hampshire, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, Washington, West Virginia. No CON (15 states): Arizona, California, Colorado, Idaho, Kansas, Minnesota, New Mexico, North Dakota, Ohio, Oregon, Pennsylvania, South Dakota, Texas, Utah, Wisconsin.

What healthcare projects trigger CON review?

Common CON triggers across active states:

• New healthcare facility construction (hospitals, ASCs, SNFs, LTACHs, IRFs)
• Facility acquisitions and ownership transfers (Connecticut requires CON for hospital ownership changes)
• Bed additions — acute care, long-term care, psychiatric
• New clinical service lines — open heart surgery, organ transplant, radiation therapy, neonatal ICU
• Major medical equipment — MRI, PET, linear accelerators above state cost thresholds (Iowa: $1.5M updated July 2025)
• New home health agency licenses (North Carolina: SMFP approval required before licensure)
• New hospice licenses (North Carolina, Florida, others)
• Service terminations (Connecticut)

Every state defines its own trigger list. A project that requires CON in Maryland may not require it in Virginia. IHS provides state-specific CON threshold analysis before project commitments are made.

What is the typical timeline for a CON application?

CON application timelines range from 3 to 18 months:

• Uncontested applications, streamlined states: 3–6 months. Washington State processed 42 applications in 2024.
• Standard applications, full review: 6–12 months
• Contested applications (incumbent opposition): 12–18 months, potentially longer with appeals

The primary timeline driver is whether competing applications are filed. Incumbent hospital opposition to ASC applications is the most common source of timeline extension.

How much does a CON application cost?

State filing fees: Washington State — $40,700 per application. Other states vary; some states have lower filing fees but require more extensive application materials.

External consulting and legal fees:

• Washington State historical average: $84,236 per application across all types (admin, legal, consulting)
• Contested hospital or ASC applications: $150,000–$350,000 typically
• Uncontested home health or hospice applications in simpler review states: lower end of range

The total market for CON application consulting and legal defense is estimated at $250 million to $450 million annually.

Can a competitor block my CON application?

Yes — and this is the primary strategic risk in CON applications. In most CON states, incumbent healthcare organizations can file competing applications or formal objections during the public comment period, triggering comparative review. Incumbent hospitals routinely file competing applications against independent ASC projects as a competitive blocking strategy — imposing cost and delay even when the incumbent has no genuine intent to build a competing facility.

Successful contested application strategy requires: a need analysis that can withstand comparative scrutiny, documented evidence that the incumbent's existing capacity does not meet the demonstrated need, and public hearing testimony that addresses the state's comparative review criteria. IHS builds contested application strategy from the pre-application stage — anticipating incumbent opposition before the LOI is filed.

What are the 2024–2025 CON law changes I need to know?

Three significant changes in 2024–2025 affect CON planning:

1. Georgia HB 1339 (2024) — Modified CON requirements for hospitals and major medical equipment. Georgia operators planning hospital expansions or equipment acquisitions should verify current CON trigger thresholds under the revised law before committing to projects.
2. Iowa — Updated July 2025 — CON thresholds updated, including changes to equipment cost triggers ($1.5M and above). Iowa operators planning equipment acquisitions or facility projects initiated after July 2025 must analyze under the revised thresholds, not prior law.
3. New York — Updated August 2025 — New CON requirements effective affecting hospitals and health system transactions. New York operators planning transactions or expansions after August 2025 should verify requirements under the current framework.

Do I need a CON before applying for home health or hospice accreditation?

In North Carolina, yes — and the sequence is legally mandated: SMFP (CON) approval → state licensure → CHAP or ACHC accreditation → Medicare certification. You cannot apply for licensure without SMFP approval, and you cannot apply for accreditation without licensure. North Carolina's CON program for home health and hospice is among the most restrictive in the country — new entrants must demonstrate need in the proposed service area, and approval can be contested by existing agencies. IHS manages the full combined CON + accreditation timeline for North Carolina home health and hospice entrants to prevent the sequential delays that arise when each regulatory step is initiated in isolation.

What happens if I build without a required CON?

Building or operating without a required CON creates four categories of exposure:

1. Facility closure orders — states can require immediate cessation of CON-triggering operations
2. Civil penalties — substantial fines for the period of unauthorized operation
3. Loss of state operating license — which voids Medicare and Medicaid participation
4. Ineligibility for Medicare/Medicaid — federal participation requires state licensure, which requires CON where applicable

There is no retroactive cure. A CON application filed after construction is complete may be denied on the grounds that the project already exists — eliminating the "need" basis of the application. The only reliable protection is CON threshold analysis before any project commitment.

How do I appeal a denied CON application?

CON denial appeals proceed through state administrative law:

1. Agency reconsideration — request administrative review before the issuing agency; some states require this before judicial appeal is available
2. Administrative hearing — before an administrative law judge or state CON board; the most common venue for contesting denials; IHS prepares the record and coordinates expert testimony
3. Judicial appeal — to state circuit or superior court if administrative remedies are exhausted; requires state-licensed counsel

Appeal timelines range from 6 months to 3+ years. Thomas G. Goddard, JD, PhD provides regulatory legal analysis of denial grounds and develops the administrative appeal strategy, coordinating with state-licensed counsel for hearing representation.

What is a Letter of Intent (LOI) in the CON process?

A Letter of Intent (LOI) is a pre-application notice required by most CON states that establishes the project scope and triggers the competing applicant window. Filing an LOI is the first formal step in the CON process. Key LOI considerations: LOIs must be filed within specific windows relative to the state's application cycles — missing a deadline requires waiting for the next cycle; the LOI scope defines what is reviewable in the application, so over-scoping or under-scoping has strategic implications; the LOI triggers the period during which incumbent organizations can file competing applications. IHS drafts LOIs to accurately characterize projects while preserving flexibility for the detailed application.

What data analysis is required for a CON application?

The need analysis is the determinative element of most CON reviews. Core analytical components:

• Demographic modeling — census data, age distribution, population growth projections for the proposed service area
• Utilization analysis — current utilization rates for the proposed service type, using state discharge data and market analysis
• Capacity analysis — existing licensed capacity in the proposed service area and documented occupancy/utilization of existing providers
• State health plan benchmarks — compliance with state-published need methodologies and health plan criteria
• Financial projections — pro forma statements demonstrating financial viability over the project's useful life
• Staffing model — licensed personnel plan demonstrating operational feasibility

Applications that project demand without grounding projections in documented demographic data and state health plan criteria are most vulnerable to denial in comparative review.

How does the Florida 2019 CON partial repeal affect my facility?

Florida's 2019 partial CON repeal eliminated requirements for hospitals, ASCs, and most other facility types. As of 2026, Florida CON requirements cover only nursing homes and hospices. Florida hospital, ASC, home health, and most other provider projects proceed without CON in Florida. If planning a Florida nursing home or hospice, CON is still required. For all other Florida healthcare projects, CON is not a regulatory barrier.

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 change-of-ownership review and approval by the state CON agency. Connecticut independently triggers CON review for hospital ownership transfers — requiring a new CON application for the transaction itself. North Carolina requires reporting changes in controlling ownership and may require review depending on transaction magnitude. IHS analyzes CON transferability implications as part of healthcare transaction due diligence for acquisitions involving CON-approved facilities.