CON program pushes away out-of-state providers

By Steve Wilson
April 20, 2020

Mississippi’s certificate of need program might have a chilling effect on out-of-state healthcare operators trying to bring services to the state.

Scrutinizing staff analyses dating back to 2001 from the state Department of Health shows that the majority (more than 75 percent) of the 284 applications for a CON were from in-state companies. 

Mississippi regulators approved 244 CON applications, rejected 37, gave conditional approval to two projects and approved one application partially.

While 49 out-of-state healthcare providers received approval (20.8 percent of all approvals), 10 operators (out of 37 denials or 27 percent) didn’t receive approval.

Mississippi’s CON program is largely a rubber stamp, since 85.61 percent of all applicants received approval since 2001. 

Mississippi is one of 35 states that requires a certificate of need, which requires health care providers to seek approval from the state Department of Health to build a new facility, add beds or expensive diagnostic equipment to an existing facility, or any other capital-related project. 

The regulated areas include:

  • Hospital and nursing home beds.
  • Inpatient psychiatric beds for children.
  • Beds in chemical dependency centers.
  • Home health services.

CON approval is even mandated for non-care related capital projects such as medical office buildings, the installation of hurricane wind-resistant windows at one hospital on the Gulf Coast and authorization for a hospital to repair damage from a tornado. This requirement for healthcare providers to seek CON approval for post-disaster repairs was removed in 20

Providers are also required to provide updates on whether a project goes over budget. Any capital project by a provider is mandated to provide updates on progress every six months and at the project’s completion. 

Thirty seven requests for a CON were related to cost overruns on capital projects since 2001 or 13 percent of all applications.

Twenty providers applied for certificates of need for diagnostic equipment and all but one was approved. Forty six applications were for construction projects while 16 applications requested a CON to add beds to an existing facility.

When providers apply for a CON or an amendment to an existing one, this initiates a 90-day process. First, the application is reviewed by the Department of Health’s Division of Health Planning and Resource Development to see if it is in compliance with the State Health Plan. This document is a blueprint composed by health department officials to centrally plan the health care needs of the state’s population. 

Among the criteria reviewed by the division include:

  • Need for the project.
  • Economic viability.
  • Possible alternatives.
  • Access to the facility for underserved and indigent people.
  • Relationship with existing providers in the area and in the state.
  • Anticipated quality of care.

Then the division staff makes a recommendation on whether the CON should be awarded. The provider appears before an independent hearing officer who makes findings of fact and issues a second recommendation. The state’s health officer makes the final call on whether a provider receives a CON. 

The only way to dispute the decision is to file an appeal in chancery court within 20 days.

CONs originated from the National Health Planning and Resources Development Act of 1974 that was signed into law by then-President Gerald Ford. This act was intended to reduce annual increases in federal health care spending and one of the cost control measures was to require states to institute CON laws to regulate health care facilities. 

This requirement was later done away with by Congress. 


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