Minnesota

Minnesota

Minnesota strictly limits healthcare growth through the use of moratoria. Minnesota’s moratoria apply within two broad categories—hospital beds and facilities/building. Minnesota does not have a traditional CON program. Instead, it allows narrow 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. PIR applicants must include their competitors’ positions with their initial application. Minn. Stat. § 144.552(f). The Department of Health reviews those applications and may make changes before recommending action by the full Minnesota Legislature. See sidebar on p.87.

COVID-19 Response

As of May 15, 2020, Minnesota had not suspended any PIR requirements 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 up to 150 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). Applications can be submitted at any time and there is no application fee. 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).

CON? Number of CONs Moratoria Temporary COVID-19 response:
Hospital Beds Yes – 1 No action
Beds Outside Hospitals No – – –
Equipment No – – –
Facilities/ Buildings Yes – 2 No action
Services No – – –
Emergency Medical Transport No – – –

Note: these citations are accurate as of May 2020.

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, 12 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. To date only 10 would-be providers have attempted the exception process. Three of them withdrew their applications before the Department issued a recommendation. 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 the remaining five 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 PIRs in Detail

Category

Moratoria

Minn. Stat.

Hospital Beds

1.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

1.There is a moratorium on opening new hospitals.

§§ 144.552(a)(2),144.551(a)(2)

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.

Minnesota PIR Exceptions

No PIR Required For:

Minn. Stat.

1.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)

2.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)

3.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)

4.A project exempt from certificate of need requirements by Laws 1981, chapter 200, section 2.

§ 144.551(b)(4)

5.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)

6.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)

7.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: (i) an increase in the overall bed capacity at that site; (ii) relocation of hospital beds from one physical site or complex to another; or (iii) redistribution of hospital beds within the state or a region of the state.

§ 144.551(b)(7)

8.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: (i) no more than 50 percent of the capacity of the closed facility is transferred; (ii) the capacity of the site or complex to which the beds are transferred does not increase by more than 50 percent; (iii) 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)

9.A project to replace a hospital or hospitals with a combined licensed capacity of 130 beds or less if: (i) the new hospital site is located within five miles of the current site; and (ii) 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)

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)

11.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)

12.Projects approved under Minn. Stat. § 144.553.

§ 144.551(b)(21)

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