General Information

The North Carolina Certificate of Need Law prohibits health care providers from acquiring, replacing, or adding to their facilities and equipment, except in specified circumstances, without the prior approval of the Department of Health and Human Services. Prior approval is also required for the initiation of certain medical services. The law restricts unnecessary increases in health care costs and limits unnecessary health services and facilities based on geographic, demographic and economic considerations.

The fundamental premise of the CON Law is that increasing health care costs may be controlled by governmental restrictions on the unnecessary duplication of medical facilities. To accomplish its purpose, the CON Law provides that "no person shall offer or develop a new institutional health service without first obtaining a certificate of need." All new hospitals, psychiatric facilities, chemical dependency treatment facilities, nursing home facilities, adult care homes, kidney disease treatment centers, intermediate care facilities for mentally retarded, rehabilitation facilities, home health agencies, hospices, diagnostic centers, and ambulatory surgical facilities must first obtain a CON before initiating development. In addition, a CON is required before any upgrading or expansion of existing health service facilities or services, which involves a capital expenditure above specified minimums.

Administration of the CON Law is entrusted to the Department of Health and Human Services. The Certificate of Need Section in the Department's Division of Health Service Regulation is responsible for its implementation. Anyone desiring a certificate of need must apply to the CON Section, and furnish information upon which the Section can find that the application is consistent with specified "review criteria." The Section may approve or deny an application outright, or it may approve the application with such conditions, as it finds necessary to bring the project into compliance with the mandated criteria.

Summary of the CON Process

The following narrative provides a brief summary of the CON process. Applicants and other interested persons should always refer to the applicable statute (G.S. 131E, Article 9, 175-190) and administrative rules (10A NCAC Subchapter 14C)for more complete information.

  1. Allocation of Beds -- At the beginning of each calendar year, a new State Medical Facilities Plan is published by the Medical Facilities Planning Section of DHSR which sets forth the maximum number of health service facility beds, by category, that may be awarded by the Certificate of Need Section (CONS).
  2. Review Schedule -- In order for competitive applications to be reviewed at the same time, the CONS has adopted a system to review applications according to a batched review schedule. Under this system, applications for similar services in the same geographic area are reviewed at the same time. Review schedules are found in the State Medical Facilities Plan.
  3. Pre-Application Procedure -- Each applicant submitting an application must submit a letter of intent (LOI) to the CONS no later than the date the application is due. Most applicants submit an LOI as the first step in the application process. In response to an LOI submitted before the beginning of the review period, the CONS forwards a letter to the applicant that indicates whether a CON review is required. If so, the CONS explains the category in which the application will be reviewed, provides the beginning review dates for that category and provides the necessary application forms. An applicant may meet with representatives of the CON Section for a pre-application conference to discuss any questions relative to the CON process and application forms.
  4. Application Submittal -- Applications must be received by 5:30 p.m. on the fifteenth day of the month immediately preceding the beginning of the applicable review period. In instances when the 15th day of the month falls on a weekend or holiday, the filing deadline is 5:30 p.m. on the next business day. The filing deadline is absolute. After an application is submitted it may not be amended, however, the CON Section may request that an applicant submit clarifying information. The CONS reviews each application to determine if it is complete. An application is deemed complete if the correct fee is paid and the original signature page is provided. If an application is deemed incomplete, within five days the CONS will notify the applicant of the items needed to make the application complete.
  5. Public Comment Period -- During the first 30 days of the review period, any person may file written comments or letters of support concerning the proposals under review.
  6. Public Hearing -- A public hearing is no longer required to be conducted for each proposal under review. However, under certain circumstances as set forth in G.S. 131E-185(a1)(2), a public hearing is required to be conducted by the CONS in the service area affected by the application no more than 20 days from the conclusion of the written comment period.
  7. Application Review -- The CONS has from 90 to 150 days to review an application for a certificate of need. Each application is reviewed against G.S. 131E-183 Review Criteria and any applicable criteria and standards in the administrative rules. All written comments and presentations at the public hearing are also taken into consideration by the CONS during the review of an application. An application must be conforming or conditionally conforming with all applicable criteria and standards in order to be approved.
  8. 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 (OAH). The administrative law judge must make his recommended decision to the Director of the Division of Health Service Regulation within 270 days after the petition is filed. The Director then makes the final agency decision, which may be appealed to the N.C. Court of Appeals.
  9. Monitoring -- After the certificate is issued, the CONS will monitor the development of the project through review of progress reports submitted by the applicant. In accordance with G.S. 131E-189, the CONS may withdraw a certificate if the holder of the certificate fails to develop and operate the service consistent with the representations made in the application or with any conditions the CONS placed on the certificate of need.