Minnesota
Minnesota strictly limits healthcare growth through the use of moratoria. Minnesota’s moratoria apply within three broad categories—hospital beds, facilities/buildings, and EMT. Minnesota also allows administrative recommendation of exceptions to its existing moratoria through a “public interest review” (PIR) program. See Minn. Stat. § 144.552. For this reason, some have deemed Minnesota a “quasi-CON” state. To initiate the PIR process, an applicant must submit a plan illustrating, among other things, that a need exists for a prohibited facility. See Minn. Stat. § 144.552. The Department of Health reviews applications and may make changes before recommending action by the full Minnesota Legislature. See sidebar on p. 94.
Minnesota’s COVID-19 Response
On May 11, 2020, Minnesota lifted its moratorium and suspended PIR in response to COVID-19.
Application Process
In Minnesota, anyone interested in obtaining a license to operate a new hospital or expand beds in an existing hospital must submit a plan to obtain an exception to the state’s moratorium. Minn. Stat. § 144.552. The plan must address: (1) whether a new hospital or new beds are necessary to provide access to care or improve services; (2) the financial impact of a new hospital or new beds; (3) how existing hospitals would be affected; (4) whether proposed services would be available to nonpaying or low-income patients; and (5) the views of affected parties. Minn. Stat. § 144.552(c)(1)–(5). The PIR process takes 150-360 days, during which time the Department takes an active role in suggesting adjustments to the plan. The Department then makes a recommendation to the Minnesota Legislature. That recommendation can be different than what the original applicant asked for. Minn. Stat. §§ 144.552(c), 144.553. Applications must be submitted by August 1 for consideration in the subsequent year’s legislative session, and applicants must pay the Department’s cost of reviewing and monitoring the plan. Minn. Stat. §§ 144.552(a), 144.553(4). A public hearing is required before an application is approved or rejected, and competitors can offer evidence and testimony as to why the PIR application should be rejected. Minn. Stat. §§ 144.552(f), 144.553(3)(g).
Types of PIR in Minnesota
| PIR? | PIR applies with expenditure of: | Temporary COVID-19 response: | |
| Hospital Beds | Yes | Any amount | Suspended |
| Beds Outside Hospitals | No | – | – |
| Equipment | No | – | – |
| Facilities/Buildings | Yes | Any amount | Suspended |
| Services | No | – | – |
| Emergency Medical Transport | Yes | Any amount | N/A |
Minnesota PIRs in Detail
| Category | Moratoria | Minn. Stat. |
| Hospital Beds | Hospitals must undergo public interest review before increasing the number of licensed beds. | §§ 144.552(a)(1), 144.551(a)(1) |
| Beds Outside Hospitals | No PIR in this category. | |
| Equipment | No PIR in this category. | |
| Facilities/Buildings | There is a moratorium on opening new hospitals. | §§ 144.552(a)(2), 144.551(a)(2) |
| There is a moratorium on radiation therapy facilities. Radiation therapy facilities may only be constructed by an entity owned, operated, or controlled by a hospital and there is a moratorium on the construction of any radiation therapy facilities in the following counties: Hennepin, Ramsey, Dakota, Washington, Anoka, Carver, Scott, St. Louis, Sherburne, Benton, Stearns, Chisago, Isanti, and Wright. | § 144.5509 | |
| Services | No PIR in this category. | |
| Emergency Medical Transport | No PIR in this category, but ambulance services require an administrative finding of necessity as a prerequisite to licensure. Competitors may intervene. | § 144E.11 |
Minnesota maintains moratoria that flatly prohibit the construction of new hospitals or any increase in hospital beds. While it is the only state with prohibitions on those specific activities, 11 states maintain some form of moratoria, which present even larger presumptions against entry into the market than CONs.
In 2004, Minnesota enacted its “public interest review” (PIR) program. The program allows providers to obtain exceptions to the moratoria by seeking first a recommendation by the Department of Health and then a vote by the full Minnesota Legislature. This process is required even when the proposed new hospital is something as small as a 12-bed psychiatric facility. Few providers have attempted the exception process. Some of them withdrew their applications before the Department issued a recommendation. At least two—including the 12 bed psychiatric facility—were denied when the Department determined the proposed services were not in the public interest. The Department determined other projects to be in the public interest, but they still had to be voted upon by the full Minnesota Legislature before they could proceed.
Minnesota PIR Exceptions
| No PIR Required For: | Minn. Stat. |
| Construction or relocation of a hospital, clinic, or other health care facility that is a national referral center engaged in substantial programs of patient care, medical research, and medical education meeting state and national needs that receives more than 40 percent of its patients from outside the state of Minnesota. | § 144.551(b)(1) |
| A project for construction or modification for which a health care facility held an approved certificate of need on May 1, 1984, regardless of the date of expiration of the certificate. | § 144.551(b)(2) |
| No PIR Required For: | Minn. Stat. |
| A project for which a certificate of need was denied before July 1, 1990, if a timely appeal results in an order reversing the denial. | § 144.551(b)(3) |
| A project exempt from certificate of need requirements by Laws 1981, chapter 200, section 2. | § 144.551(b)(4) |
| A project involving consolidation of pediatric specialty hospital services within the Minneapolis-St. Paul metropolitan area that would not result in a net increase in the number of pediatric specialty hospital beds among the hospitals being consolidated. | § 144.551(b)(5) |
| A project involving the temporary relocation of pediatric-orthopedic hospital beds to an existing licensed hospital that will allow for the reconstruction of a new philanthropic, pediatric-orthopedic hospital on an existing site and that will not result in a net increase in the number of hospital beds. Upon completion of the reconstruction, the licenses of both hospitals must be reinstated at the capacity that existed on each site before the relocation. | § 144.551(b)(6) |
| The relocation or redistribution of hospital beds within a hospital building or identifiable complex of buildings provided the relocation or redistribution does not result in: (1) an increase in the overall bed capacity at that site; (2) relocation of hospital beds from one physical site or complex to another; or (3) redistribution of hospital beds within the state or a region of the state. | § 144.551(b)(7) |
| Relocation or redistribution of hospital beds within a hospital corporate system that involves the transfer of beds from a closed facility site or complex to an existing site or complex provided that: (1) no more than 50 percent of the capacity of the closed facility is transferred; (2) the capacity of the site or complex to which the beds are transferred does not increase by more than 50 percent; (3) the beds are not transferred outside of a federal health systems agency boundary in place on July 1, 1983; and (iv) the relocation or redistribution does not involve the construction of a new hospital building. | § 144.551(b)(8) |
| A construction project involving up to 35 new beds in a psychiatric hospital in Rice County that primarily serves adolescents and that receives more than 70 percent of its patients from outside the state of Minnesota. | § 144.551(b)(9) |
| A project to replace a hospital or hospitals with a combined licensed capacity of 130 beds or less if: (1) the new hospital site is located within five miles of the current site; and (2) the total licensed capacity of the replacement hospital, either at the time of construction of the initial building or as the result of future expansion, will not exceed 70 licensed hospital beds, or the combined licensed capacity of the hospitals, whichever is less. | § 144.551(b)(10) |
| The relocation of licensed hospital beds from an existing state facility operated by the Commissioner of Human Services to a new or existing facility, building, or complex operated by the Commissioner of Human Services; from one regional treatment center site to another; or from one building or site to a new or existing building or site on the same campus. | § 144.551(b)(11) |
| The construction or relocation of hospital beds operated by a hospital having a statutory obligation to provide hospital and medical services for the indigent that does not result in a net increase in the number of hospital beds, notwithstanding Minn. Stat. § 144.552, 27 beds, of which 12 serve mental health needs, may be transferred from Hennepin County Medical Center to Regions Hospital. | § 144.551(b)(12) |
| A construction project involving the addition of up to 31 new beds in an existing nonfederal hospital in Beltrami County. | § 144.551(b)(13) |
| A construction project involving the addition of up to eight new beds in an existing nonfederal hospital in Otter Tail County with 100 licensed acute care beds. | § 144.551(b)(14) |
| No PIR Required For: | Minn. Stat. |
| A construction project involving the addition of up to 20 new hospital beds in an existing hospital in Carver County serving the southwest suburban metropolitan area. | § 144.551(b)(15) |
| A project for the construction or relocation of up to 20 hospital beds for the operation of up to two psychiatric facilities or units for children provided that the operation of the facilities or units have received the approval of the commissioner of human services. | § 144.551(b)(16) |
| A project involving the addition of 14 new hospital beds to be used for rehabilitation services in an existing hospital in Itasca County. | § 144.551(b)(17) |
| A project to add 20 licensed beds in existing space at a hospital in Hennepin County that closed 20 rehabilitation beds in 2002, provided that the beds are used only for rehabilitation in the hospital’s current rehabilitation building. If the beds are used for another purpose or moved to another location, the hospital’s licensed capacity is reduced by 20 beds. | § 144.551(b)(18) |
| A critical access hospital established under Minn. Stat. § 144.1483, clause (9), and 42 U.S.C. § 1395i-4, that delicensed beds since enactment of the Balanced Budget Act of 1997, to the extent that the critical access hospital does not seek to exceed the maximum number of beds permitted such hospital under federal law. | § 144.551(b)(19) |
| Notwithstanding Minn. Stat. § 144.552, a project for the construction of a new hospital in the city of Maple Grove with a licensed capacity of up to 300 beds, subject to statutory conditions. | § 144.551(b)(20) |
| Projects approved under Minn. Stat. § 144.553. | § 144.551(b)(21) |
| A project for the construction of a hospital with up to 25 beds in Cass County within a 20-mile radius of the state Ah-Gwah-Ching facility, provide the hospital’s license holder is approved by the Cass County Board. | § 144.551(b)(22) |
| A project for an acute care hospital in Fergus Falls that will increase the bed capacity from 108 to 110 beds by increasing the rehabilitation bed capacity from 14 to 16 and closing a separately licensed 13-bed skilled nursing facility. | § 144.551(b)(23) |
| Notwithstanding Minn. Stat. § 144.552, a project for the construction and expansion of a specialty psychiatric hospital in Hennepin County for up to 50 beds, exclusively for patients who are under 21 years of age on the date of admission. The commissioner conducted a public interest review of the mental health needs of Minnesota and the Twin Cities metropolitan area in 2008. No further public interest review shall be conducted for the construction or expansion project under this clause. | § 144.551(b)(24) |
| A project for a 16-bed psychiatric hospital in the city of Thief River Falls, if the commissioner finds the project is in the public interest after the PIR conducted under Minn. Stat. § 144.552 is complete. | § 144.551(b)(25) |
| A project for a 20-bed psychiatric hospital, within an existing facility in the city of Maple Grove, exclusively for patients who are under 21 years of age on the date of admission, if the commissioner finds the project is in the public interest after the PIR conducted under Minn. Stat. § 144.552 is complete, subject to statutory conditions. | § 144.551(b)(26) |
| A project involving the addition of 21 new beds in an existing psychiatric hospital in Hennepin County that is exclusively for patients who are under 21 years of age on the date of admission. | § 144.551(b)(27) |
| A project to add 55 licensed beds in an existing safety net, level I trauma center hospital in Ramsey County as designated under Minn. Stat. § 383A.91, subd. (5), of which 15 beds are to be used for inpatient mental health and 40 are to be used for other services. In addition, five unlicensed observation mental health beds shall be added. | § 144.551(b)(28) |
| Air ambulance services are exempt from the ambulance-services quasi-CON. | § 144E.12 |