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Know your state’s certificate of need regulations

Ambulatory Safety Monitor, July 28, 2004

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Heads up! Ambulatory surgery centers (ASC) under construction may have to follow Certificate of Need (CON) legislation or regulations, which varies by state.

A CON is a permit for the establishment or modification of a healthcare institution, facility, or service. The CON program ensures that healthcare projects aren't duplicated unnecessarily, which would lead to an increase in healthcare costs. Those who are not in favor of CON, such as Craig Jeffries, executive director of American Association of Ambulatory Surgery Centers in Johnson City, TN, argue that there is no need for a regulatory process such as CON that restricts ASC growth and the need for improvement in surgery in communities.

What's the big deal?
CON supporters say that the legislation or regulations in participating states keep healthcare costs down. A recent study shows that states with CON have healthcare costs of up to 164% lower than states without (http://www.ahpanet.org). Jeffries disagrees, saying that the lower cost goes to the patient, employer, and the health insurance system because, for example, Medicare payments in most cases are lower to ASCs than hospitals (http://www.aaasc.org).

He also says ASCs offer a much more efficient use of healthcare resources, such as administrators, nurses, physcians, and technicians affording more time with the patients, which can lead to a better, more predictable outcome.

Tips to stay at the forefront of CON
Regardless of where you stand on the issue, potential investors in ASCs need to be aware of their state's requirements in order to stay in compliance. Jeffries says that state ASC associations are an important source of CON information. Web sites for most state ASC associations are available through www.aaasc.org.

In addition, you can obtain information from communication services such as the American Health Planning Association (http://www.ahpanet.org). The following are some examples of state Web sites with CON information (check your state Web site for further information):

• Alabama: http://www.shpda.state.al.us/Index1.html
• Tennessee: http://www.tn.gov/hsda/
• New York: http://www.health.state.ny.us/nysdoh/cons/main.htm
• Oklahoma: http://www.health.state.ok.us/
• Michigan: http://www.michigan.gov/mdch/1,1607,7-132-2945_5106---,00.html
• Nebraska: http://www.hhs.state.ne.us/crl/crlindex.htm

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