Hospitals Push Back on Proposed “Certificate of Need” Regulatory Changes

Hospitals are raising concerns about proposed changes to Connecticut’s certificate of need (CON) process — a regulatory process that requires healthcare providers to obtain state approval before making certain changes in services, such as mergers, increasing capacity, terminating a service, transferring ownership, or acquiring major equipment like MRI or CT scanners.  Hospitals have long expressed concern that the CON process can create barriers to care, administrative strain, and critical delays.

At a March 4 hearing of the Public Health Committee, the Connecticut Hospital Association (CHA) voiced opposition to HB 5045, An Act Streamlining Health Care Facility Approvals.  CHA acknowledged the need to modernize Connecticut’s CON process but urged lawmakers to refine the proposal rather than enact the bill as drafted.  CHA emphasized that hospitals already face significant financial and operational challenges and warned that sweeping changes to the CON system — including expanding the scope of transactions subject to review and restructuring decision-making authority — could unintentionally slow approvals and add complexity to an already strained system.

The bill would shift CON oversight from the Connecticut Office of Health Strategy (OHS) to a newly envisioned three-member panel within the Connecticut Department of Public Health (DPH), with representatives from DPH, the Connecticut Office of Policy and Management (OPM), and the Connecticut Department of Social Services (DSS).  While the proposal would eliminate several CON triggers — including for termination of services — it would expand the scope of others, most significantly for changes in ownership or control.  The bill would also establish quarterly review timelines, require public hearings for applications, and broaden the definition of “transfer of ownership.”

Supporters of the proposal argue the overhaul would bring more consistent and timely decision-making to a process that has long been criticized as cumbersome.  Hospitals agree that improvements are needed but caution that the proposed structure could delay approvals and add administrative burdens if not carefully designed.

CHA provided recommended changes in submitted written testimony to better align the CON process with improving patient access while easing regulatory burdens on hospitals and health systems.  The recommendations were developed in consultation with CHA’s CON Work Group.

During the same hearing, testimony from several hospital systems echoed concerns that the proposal adds new regulatory layers without recognizing pressing challenges such as workforce shortages and ongoing financial pressures.  Hospital leaders urged lawmakers to ensure that any changes to the oversight structure support access to care while avoiding unnecessary delays or costs.

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Hospital Assessment Fees Supporting OHS

As the state considers restructuring OHS in part to address the CON process, hospitals are also urging policymakers to ensure that the assessments hospitals pay to fund these processes are used responsibly for work that advances healthcare oversight and access to care.  A recent Connecticut Inside Investigator report highlights how OHS has raised the assessment levied on hospitals by 40% over the last four years to fund the agency, adding millions to annual payments made by hospitals.

CHA urged caution that as the state works to disband the Office of Health Strategy and redistribute responsibilities, it is essential that assessment funds be used exclusively for the purposes authorized in statute.

“They should not be diverted to broader agency operations or to support functions unrelated to statutory responsibilities, regardless of where those responsibilities may be reassigned,” CHA said in a statement. 

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Behavioral Health CON Exemption

Separately, but also related to CON processes, the legislature recently approved an emergency certified bill that includes a provision creating a CON exemption for one hospital related to behavioral health beds.  While the exemption is intended to address a specific situation, CHA noted that expanding such flexibility could benefit hospitals across the state.

“We appreciate lawmakers’ commitment to addressing the needs of children and adolescents requiring behavioral health services and care.  To expand access most effectively, we encourage the state to consider an approach that includes all hospitals — particularly those already operating child and adolescent behavioral health beds — rather than focusing on a single provider,” CHA said in a statement. “For many years we have advocated for streamlining the process so hospitals with existing programs can open additional beds more quickly.  Leveraging existing expertise and infrastructure would reduce delays and help increase access to care statewide.”

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As debate continues, hospitals and policymakers have signaled a shared willingness to engage on refining reforms to improve oversight while protecting patient care and access across Connecticut.

Read CHA’s testimony on HB 5045 here.

Watch CHA’s Senior Vice President of Policy Paul Kidwell testify before the Public Health Committee here.