To learn more about the application process, we reviewed every CON application submitted in Kentucky that received a final decision from January 1, 2019 through May 19, 2023. 1
We counted approvals, disapprovals, withdrawals, revocations, and voided applications, while we excluded deferrals and applications that remained pending at the time of review. In total, we reviewed 262 complete applications. The vast majority—76% of the applications—came from existing providers. Only 24% of the applications were from providers not already operating in Kentucky. The Cabinet approved 227 (86.6%) of the applications it received. But that doesn’t tell the whole story.
Figure 2. Approval Rate
Figure 3. Wait Time for a Decision
Of the 262 applications, 164 (63%) were complete applications for nonsubstantive review. The most common type of nonsubstantive application was for adult day healthcare centers. Recall that under nonsubstantive review, the applicant does not bear the burden of proving need; need is presumed. The Cabinet approved all but seven of these applications—an approval rate of 96 percent. These can essentially be thought of as non-CON cases.
In contrast, the Cabinet received 98 complete applications for substantive (formal) review. In these cases, the Cabinet must assess need. The Cabinet approved 70 applications (71%).
Neither the applicant’s status as an incumbent provider nor the size of the investment were statistically significantly related to the odds of approval. As expected, opposition did statistically significantly reduce the chances of approval and delayed the approval process. As shown in Figure 2 above, the approval rate for unopposed substantive review applications was 84% but was nearly cut in half, to 43%, for opposed applications.
Opposed applications also took significantly longer to receive a final decision. Among unopposed applications, the wait time averaged 5.4 months. That time nearly doubled, to an average of 10.2 months for opposed applications. 2
Figure 3 shows this delay. As far as we can tell, all opposed parties were would-be competitors.
While it’s good news that most applications—even most substantive review applications—were approved during this time period, the analysis suggests that incumbent providers use the contested application process to block and delay competitors from offering services that patients need.
Between 2019 and 2023, CON laws denied Kentuckians access to psychiatric services, acute hospital services, skilled nursing facilities, ground ambulances, and more. We believe the number of providers that abandon their plans without applying for a CON is high, especially in light of the SHP’s strict need formulas.