Proposed Changes to North Carolina CON Process – February 2012 Update

February 6, 2012

On Jan. 19, 2012, the North Carolina House Select Committee on Certificate of Need Process and Related Hospital Issues (“Committee”) met to begin the process of determining which recommendations it will make to the House regarding the Certificate of Need (CON) and Certificate of Public Advantage (COPA) process. The Committee intends to submit draft language for revising the CON laws at their final meeting later this year.

Note that the Committee has not yet determined all the proposals that it will make. Thus far, the Committee intends to make the following recommendations:

  1. Air ambulances and solid organ transplant services should be removed from the CON statute.
  2. The Committee decided not to recommend removing the CON requirement for diagnostic service centers. The Committee also decided to have further discussions on diagnostic service centers.
  3. The Committee will have further discussions with regards to adding deadlines and fees for letters of review, CON Exemption Requests and Material Compliance Requests. Currently there are no deadlines or fees for these requests.
  4. The Committee will ask for recommendations from the Division of Health Service Regulation on (i) how applications could be submitted electronically and (ii) how all applications and other requests, in addition to agency decisions, could be posted on the agency’s website to allow for greater transparency.
  5. The Committee will recommend that the threshold amount for requiring a project to obtain a CON be increased from the current amount of $2 million to $4 million.
  6. The Committee will recommend that the threshold amount required for expedited review be eliminated (currently $5 million).
  7. The Committee will recommend that the threshold amount for requiring a CON for major medical equipment be increased from the current amount of $750,000 to $1.5 million.
  8. The Committee will have further discussions on whether to increase the threshold amount for replacement equipment CONs. The current amount is $2 million.

The Committee has discussed only roughly one-third of the issues on its proposed agenda. The Committee is scheduled to meet again on Feb. 15, 2012, March 15, 2012, and April 19, 2012, for further discussions on the final recommendations.

You can view a copy of the Committee’s full topics for discussion here.

McGuireWoods Consulting will be tracking this issue very closely over the next 18 months. If you are interested in learning more about how our team of legislative affairs professionals can help you stay in front of these ongoing developments, please contact one of the authors.