North Carolina

North Carolina

North Carolina is one of eight states to require CONs across all six broad categories—hospital beds, beds outside hospitals, equipment, facilities, services and emergency medical transport. North Carolina is the only state to have had its CON program declared unconstitutional. In re Certificate of Need for Aston Park Hosp., Inc., 282 N.C. 542 (1973). After that, the General Assembly adopted a new CON regime and expressly included a legislative findings of fact section. See N.C. Gen. Stat. § 131E-175. In addition to North Carolina’s existing 12 service CONs, North Carolina also maintains a catch-all CON. That is, if no specific CON applies, the catch-all CON requires healthcare facilities to obtain a CON to develop or expand any healthcare service if doing so will cost above $2 million. N.C. Gen. Stat. § 131E-176(16)(b).

COVID-19 Response

On April 8, 2020, Governor Cooper issued an order authorizing the Department of Health and Human Services to accept requests to temporarily: (1) relocate beds; (2) add or relocate dialysis stations; (3) acquire medical imaging equipment and (4) operate ambulatory surgical facilities as temporary hospitals. Exec. Order 130 (Apr. 8, 2020). The Order included detailed instructions explaining how healthcare facilities and providers must request approval. Although less burdensome than a CON, the Order still required healthcare providers and facilities to submit to an application process and wait for an approval before expanding capacity to respond to COVID-19.

Application Process

In North Carolina, the CON application process takes approximately 90 days. N.C. Gen. Stat. § 131E-185(a1); 10A N.C. Admin. Code 14C.0205(a). Applications can be submitted at any time throughout the year but are reviewed on batching cycles as set forth in the State Medical Facilities Plan. The fee for a CON application ranges from $5,000 to $50,000. N.C. Gen. Stat. § 131E-182(c). Competitors can intervene in the application process and can offer evidence or argument as to why an application should be denied. N.C. Gen. Stat. § 131E-185(a1)(1)–(2).

CON? Number of CONs Moratoria Temporary COVID-19 response:
Hospital Beds Yes 3 – Expedited at least some CON reviews
Beds Outside Hospitals Yes 13 – Expedited at least some CON reviews
Equipment Yes 10 – Expedited at least some CON reviews
Facilities/ Buildings Yes 22 – Expedited at least some CON reviews
Services Yes 12 – Expedited at least some CON reviews
Emergency Medical Transport Yes 1 – No action

Note: these citations are accurate as of May 2020.

North Carolina is the only state that has had its CON program declared unconstitutional. See In re Certificate of Need for Aston Park Hosp., Inc., 282 N.C. 542 (1973). There, a hospital sued when it was unable to open because it could not get a CON. The state Supreme Court ruled it was unconstitutional to deny the CON—after all, the hospital had private funding and would promote the public health. Undeterred, North Carolina reintroduced its CON laws after this loss in court. 

Today, another CON challenge is pending in North Carolina. See Singleton v. N.C. Dep’t of Health Servs. 

No. 20 CVS 5150 (Cty. of Wake, Sup. Ct. filed Apr. 23, 2020).a This time, North Carolina’s CON law prohibits ophthalmologist Dr. Jay Singleton from offering low-cost surgeries to his patients. Dr. Singleton owns a state-of-the-art operating facility, but the law forbids him from using it. Instead, he is legally required to perform surgeries at the local hospital, which ends up costing his patients thousands of dollars more. But patients and providers—not government—should decide what healthcare services are “needed.” 

North Carolina CONs in Detail

Category

Types of CONs

N.C. Gen. Stat.

Hospital Beds

Any increase in beds, relocation of beds from one facility to another, or redistribution of capacity among categories of beds.

N.C. Gen. Stat. § 131E-176(5)

1.Hospital.

§§ 131E-178(a),

131E-176(9)(9a)-(9c)

2.Long-term care hospital.

§ 131E-176(9b)

3.Non-health service facility bed to a hospital bed.

§ 131E-176(16)(m)

Beds Outside Hospitals

Any increase in beds, relocation of beds from one facility to another, or redistribution of capacity among categories of beds.

N.C. Gen. Stat. § 131E-176(5)

1.Psychiatric facility.

§§ 131E-178(a),

131E-176(9a)-(9c), (16)(c)

2.Rehabilitation facility.

3.Nursing home facility.

4.Adult care home.

5.Kidney disease treatment center, including freestanding hemodialysis units.

6.Intermediate care facility for individuals with intellectual disabilities.

7.Home health agency office.

8.Chemical dependency treatment facility.

§ 131E-176(9b)

Category

Types of CONs

N.C. Gen. Stat.

Beds Outside Hospitals

Any increase in beds, relocation of beds from one facility to another, or redistribution of capacity among categories of beds.

N.C. Gen. Stat. § 131E-176(5)

9.Diagnostic center.

10.Hospice inpatient facility.

11.Hospice residential care facility.

12.Ambulatory surgical facility.

§ 131E-176(9b)

13.Conversion of a non-health service facility bed to a hospital bed.

§ 131E-176(16)(m)

Equipment

Acquisition by purchase, donation, lease, transfer or comparable arrangement of any of the listed equipment requires a CON.

N.C. Gen. Stat. § 131E-178(b)

1.Cardiac catheterization equipment.

§ 131E-176(16)(f1)(3)

2.Gamma knife.

§ 131E-176(16)(f1)(4)

3.Heart-lung bypass machine.

§ 131E-176(16)(f1)(5)

4.Linear accelerator.

§ 131E-176(16)(f1)(5a)

5.Lithotripter.

§ 131E-176(16)(f1)(6)

6.Magnetic resonance imaging scanner.

§ 131E-176(16)(f1)(7)

7.Positron emission tomography scanner.

§ 131E-176(16)(f1)(8)

8.Simulator.

§ 131E-176(16)(f1)(9)

9.The furnishing of mobile medical equipment to any person to provide health services in North Carolina, which was not in use in North Carolina prior to the adoption of this provision, if the equipment would otherwise be subject to review.

§ 131E-176(16)(s)

10. Other single unit or single system of components used to provide medical and other health services that costs more than $750,000.

§ 131E-176(14o)

Facilities/Buildings

1.Hospital.

2.Long-term care hospital.

3.Psychiatric facility.

4.Rehabilitation facility.

§ 131E-176(9b)

Category

Types of CONs

N.C. Gen. Stat.

Facilities/Buildings

5.Nursing home facility.

6.Adult care home.

7.Kidney disease treatment center, including freestanding hemodialysis units.

8.Intermediate care facility for individuals with intellectual disabilities.

9.Home health agency office.

10.Chemical dependency treatment facility.

11.Diagnostic center.

§ 131E-176(9b)

12.Hospice office.

§§ 131E-176(9b),

131E-176(16)(n)

13.Hospice inpatient facility.

§§ 131E-176(9b),

131E-176(16)(n)

14.Hospice residential care facility.

§ 131E-176(16)(n)

15.Ambulatory surgical facility.

§ 131E-176(9b)

16.The construction, development, establishment, increase in the number or relocation of an operating room or gastrointestinal endoscopy room in a licensed health service facility.

§ 131E-176(16)(u)

17.Opening an additional office by an existing home health agency within its service area.

§ 131E-176(16)(o)

18.Opening an additional office by hospice within its service area.

§ 131E-176(16)(o)

19.Opening of any office by an existing home health agency outside its service area.

§ 131E-176(16)(o)

20.Opening of any office by hospice outside its service area.

§ 131E-176(16)(o)

Category

Types of CONs

N.C. Gen. Stat.

Facilities/Buildings

21.The purchase, lease or acquisition of any health service facility, or portion thereof, or a controlling interest in the health service facility or portion thereof, if the health service facility was developed under a certificate of need issued pursuant to Gen. Stat. 131E-180.

§§ 131E-176(16)(l),

131E-176(9b)

22.The acquisition by purchase, donation, lease, transfer or comparable arrangement by any person of major medical equipment.

§§ 131E-176(16)(p),

131E-176(14o)

Services

1.Offering dialysis services by a home service facility if not offered in the previous 12 months.

§ 131E-176(16)(d)

2.Offering home health services by a health service facility if not offered in the previous 12 months.

§ 131E-176(16)(d)

3.Development or offering bone marrow transplantation services.

§ 131E-176(16)(f)(1)

4.Development or offering burn intensive care services.

§ 131E-176(16)(f)(2)

5.Development or offering cardiac catheterization services.

§ 131E-176(16)(f)(2a)

6.Development or offering neonatal intensive care services.

§ 131E-176(16)(f)(3)

7.Development or offering open-heart surgery services.

§ 131E-176(16)(f)(4)

8.Development or offering solid organ transplantation services.

§ 131E-176(16)(f)(5)

9.The conversion of a specialty ambulatory surgical program to a multispecialty ambulatory surgical program.

§ 131E-176(16)(r)

10.The addition of a specialty to a specialty ambulatory surgical program.

§ 131E-176(16)(r)

11. Any change in the approved capital expenditure amount for any approved project during construction or within one year of CON approval requires a new CON.

§ 131E-176(16)(e)

12.Any expenditure above $2 million to develop or expand a health service.

§ 131E-176(16)(b)

Emergency Medical Transport

1.Air ambulance. (Although this CON has not been repealed, the North Carolina Department of Health and Human Services repealed the coordinating regulation in 2013 and no longer enforces this CON.)

§ 131E-176(16)(f1)(1)

North Carolina CON Exceptions

No CON Required for:

N.C. Gen. Stat.

1.New institutional health service solely for research so long as the service will not: (1) affect the facility’s charges for provision of medical or other patient care services other than those related to the research; (2) substantially change the bed capacity at the facility; or (3) substantially change the medical or other patient care services of the facility.

§ 131E-179

2.If a written proposal explains why a new health facility is needed for any of the following reasons, then it is exempt from a CON, if the service is required: (1) to eliminate or prevent imminent safety hazards as defined in federal, state or local fire, building, or life safety codes or regulations, (1a) to comply with state licensure standards, (1b) to comply with accreditation or certification standards which must be met to receive reimbursement under Title XVIII of the Social Security Act or payments under a state plan for medical assistance approved under Title XIX of that Act, (2) repealed, (3) to provide data processing equipment, (4) to provide parking, heating, cooling, elevators or other basic plan or mechanical improvements, (5) to replace or repair facilities destroyed or damaged by accident or natural disaster, (6) to provide any nonhealthy service facility or service, (7) to provide replacement equipment, (8) to acquire an existing health service facility, including equipment owned by the health service facility at the time of acquisition. A facility not currently licensed as an adult care home that was licensed as an adult care home within the preceding 12 months is considered an existing health service facility for the purposes of this subdivision and (9) to develop or acquire a physician office building regardless of cost, unless a new institutional health service other than defined in Gen. Stat. 131E-176(16)(b) is offered or developed in the building.

§ 131E-184(a)

3.Transfer of existing acute care beds to psychiatric beds if certain conditions are met.

§ 131E-184(c)

4.New chemical dependency or substance abuse facility for the purpose of providing services solely to inmates of the Division of Adult Correction and Juvenile Justice of the Department of Public Safety.

§ 131E-184(d)

5.Capital expenditure over $2 million if an entity: (a) solely for the purpose of renovating, replacing on the same site, or expanding any of the following existing facilities: 1. nursing home, 2. adult care home, 3. immediate care facility for individuals with intellectual disabilities; and (b) not resulting in change in bed capacity or any other new institutional health service.

§ 131E-184(e)(1)

6.Capital expenditure over $2 million if entity writes to Department and says expenditure is for: (a) conversion of semiprivate resident rooms to private rooms, (b) providing innovative, homelike residential dining spaces, or (c) changing residential living or common areas to improve quality of life of residents.

§ 131E-184(e)(2)

7.Capital expenditure on replacement equipment over $2 million if: (1) equipment replaced is located on main campus, (2) previously issued CON for the equipment being replaced and (3) meets exemption criteria.

§ 131E-184(f);

10A N.C. Admin. Code 14C.0303

8.Capital expenditure over $2 million if: (1) the sole purpose is to renovate, expand or replace same site, (2) no change in bed capacity, no new facility or no new service and (3) meets exemption criteria.

§ 131E-184(g)

9.Legacy medical care facility.

§ 131E-184(h)

10.Relocation of an operating room or gastrointestinal endoscopy room within the same building or on the same grounds or to grounds not separated by more than a public right-of-way adjacent to the grounds where the operating room or gastrointestinal endoscopy room is currently located.

§§ 131E-178(a),

131E-176(16)(u)

Explore State Profiles