Certificate of Need Laws Dangerously Limit Providers

Most people aren’t familiar with Certificate of Need but CON laws in many states are seriously endangering lives during the COVID-19 coronavirus pandemic.

CON laws require health care providers to obtain permission from a state board before opening a new health care facility, and in some cases before utilizing new technologies, purchasing new equipment, or offering new services. The provider must prove to the board that the community “needs” the new service, facility, etc. Existing providers almost always challenge the proposal and applications are often denied.

So why is this important in our current circumstances? Many states have already eliminated their CON laws as a relic from the past that did not achieve the desired goal of improving access and lowering health care costs. However, some states are still requiring CON approval, including COVID-19 hot spot states like New York, Illinois and Washington.

States like New York, that limit the number of acute hospital beds, are starting off at a disadvantage when facing a pandemic the likes of this one because the number of beds isn’t based on demand, but on other factors — some that have nothing to do with providing care.

Problems with Medicaid reimbursements and other factors can exacerbate the problem.

And under CON, increasing the number of hospital beds isn’t a quick fix. Applicants must jump through bureaucratic hoops that can take years and millions of dollars to manage. This simply isn’t feasible in many cases especially when there is a good chance an existing provider will be successful in blocking your application.

The effects of bad policy have led to the current shortage and legislators in CON states should look at preventing this same problem in the future. It may be too late now for a repeal of CON laws to help in the current situation but next time, it could be much worse.