Medical organizations in some US states must obtain a certificate of need from the state health department to acquire, replace, or expand their facilities. The purpose of these regulations is to control healthcare costs and limit unnecessary medical services. CON laws are enacted in 36 states and specify businesses that require suppliers to request a certificate of need. Representatives of a medical facility often need to demonstrate that a new or expanded service they offer is needed in an area served by the facility. Some businesses require no application for a certificate of necessity under some CON laws.
Medical organizations in some U.S. states that wish to acquire, replace, or expand their facilities or establish certain medical services must obtain a certificate of need from the state health department in accordance with regional regulations. The health department takes into account several factors, including demographics, economic indicators and geography when approving or disapproving requests from health care professionals for a certificate of need. The purpose of these regulations, called CON laws, is to control rising health care costs and limit unnecessary medical services, although some argue that the effect of these laws is the opposite of the original intent. Lawmakers pushing for these regulations often believe that government restrictions on who build or improve medical facilities — and the services they can provide — do a better job of controlling health care costs than letting private medical facilities regulate themselves.
CON laws are enacted in 36 states, and medical organizations not located in those states do not need to apply for a certificate of need. Some healthcare facilities are also exempt from CON laws, but other types of agencies are described in these laws. These facilities often include long-term care hospitals, nursing homes, and diagnostic centers. CON laws also specify businesses that require suppliers to request a certificate of need. Some examples include changes to the bed capacity in the facility, establishment of critical care services for burns, and organ transplant services.
Representatives of a medical facility often need to demonstrate that a new or expanded service they offer is needed in an area served by the facility. If the need cannot be demonstrated, it is often seen as something that will lead to an unnecessary increase in healthcare costs. The state health department may also disapprove the request if it will duplicate existing services in the region or if it is offered by competing medical providers. For example, a doctor who wants to expand home health care services may need to request a certificate of need. The state health department sets deadlines by which applicants must submit their exam requests.
Some businesses require no application for a certificate of necessity under some CON laws. These are considered reasonable, ordinary and necessary expenses or services that can be expected from medical providers and facilities. A medical facility may not need to apply for a certificate, for example, to establish an outpatient surgical center.
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