Like many other states, Kentucky has an extensive CON process in place for healthcare services and facilities. Winning approval for a CON application is often a time consuming and difficult undertaking. Working with RPC provides clients with a team of consultants with experience working with CON projects.

When working on a CON project, RPC can prepare the entire CON application or sections of the application as the client prefers. When the client is defining the project and deciding whether to apply, RPC can help assess the market and regulatory situation to determine the relative likelihood of success for a project. RPC not only completes a thorough review of the competitive environment, market need and financial analysis, but also works seamlessly with the client’s staff, architects, engineers, and other outside consultants to create a solid CON application.

RPC is led by Ron Luke, JD, PhD, who has prepared CON applications and presented testimony in CON hearings since 1981 in over 20 states.  RPC’s work on CON projects includes the opening of new acute care hospitals, hospices, physical rehabilitation and psychiatric specialty hospitals, ambulatory surgery centers and nursing homes, the relocation and addition of beds, and acquiring major medical equipment. Working with RPC during the CON process gives the applicant the advantage of a skilled, experienced team that can provide expert advice and produce an effective CON application.

State Agencies

Division of Certificate of Need
Part of the Cabinet of Health and Family Services, this group administers and oversees the CON process.  The Cabinet renders final decisions.

Cabinet for Health and Family Services
Division of Certificate of Need
275 E. Main St., 5E-A
Frankfort, KY 40621
(502) 564-9592

Hearing Officers, Health Services Administrative Hearings Branch
The hearing officers preside over formal review hearings and have authority to change most hearing procedures on a case-by-case basis.

Facilities and Services that Require CON

A Certificate of Need is an authorization by the Cabinet of Health and Family Services to acquire, establish, offer, substantially change the bed capacity, or substantially change a health service.  The program’s purpose is to control the growth of unnecessarily duplicative services, reduce costs, and increase the quality of health care in the commonwealth of Kentucky.  A CON is necessary in order to:

  • Establish a health facility or service, which includes:
    • Acute Care
      • Acute care hospitals
      • Acute care beds
      • Comprehensive physical rehabilitation beds
      • Special care neonatal beds
      • Organ transplant program
    • Behavioral Health Care
      • Psychiatric beds
      • Psychiatric residential treatment facilities
      • Chemical dependency programs
    • Long-Term Care
      • Nursing facility beds
      • Home health agencies
      • Hospice care
    • Intermediate care facilities for individuals with intellectual disabilities
    • Diagnostic and Therapeutic Equipment and Procedures
      • Cardiac catheterization service
      • Magnetic resonance imaging
      • Megavoltage radiation equipment
      • Positron emission tomography equipment
      • New technology program
    • Miscellaneous Services
      • Ambulance providers
      • Ambulatory care centers
      • Ambulatory surgical centers
      • Emergency care facilities
      • Family care homes
      • Kidney disease treatment and hemodialysis centers
    • Nursing homes
    • Personal care homes
    • Outpatient clinics
    • Private duty nursing
  • Obligate a capital expenditure which exceeds the capital expenditure minimum
  • Make a substantial change in the bed capacity of a health facility
  • Make a substantial change in a health service
  • Make a substantial change in a project
  • Acquire major medical equipment with costs in excess of the medical equipment expenditure minimum
  • Alter a geographical area or alter a specific location which has been designated on a CON or license
  • Transfer an approved CON for the establishment of a new health facility or the replacement of a licensed facility

Physician offices are exempt from CON and licensure.  The following facilities require licensure but do not require CON:

  • Abortion facilities
  • Hospital that does not charge patients for services and does not accept financial support from the government
  • Assisted living residences
  • Family care homes
  • State veterans’ nursing homes
  • Services provided on a contractual basis in a rural primary care hospital
  • Community mental health centers
  • Primary care centers
  • Rural health clinics
  • Private duty nursing services licensed as nursing pools
  • Group homes
  • Residential crisis stabilization units
  • Residential substance use treatment programs with fewer than 17 beds
  • Outpatient behavioral health treatment (excluding partial hospitalization programs)
  • End stage renal disease dialysis facilities
  • Swing beds
  • Special clinics (unless they exceed the capital threshold for equipment)
  • Non-clinical expenditures
  • Nursing home beds exclusively limited to on-campus residents of a certified continuing care retirement community
  • Relocation of hospital administrative or outpatient services into medical office buildings which are on or contiguous to the premises of the hospital
  • Relocation of acute care beds from hospitals under common ownership and within the same area development district
  • Redistribution of acute care beds by licensure classification if the total number of licensed beds remains constant
  • Residential hospice facilities established by licensed hospice programs
  • Designated health services provided in an existing facility where the cost is less than $600,000:
    • Psychiatric care that includes chemical dependency treatment
    • Level One or Level Two neonatal care
    • Cardiac catheterization
    • Open heart surgery

What Criteria are Used to Review a CON?

There are three types of CON review:

  • Statutory Nonsubstantive Review
    • for minor facility changes
    • may be filed at any time
    • quick decision
  • Regulatory Nonsubstantive Review
    • for projects with no established criteria in the State Health Plan
    • applications are batched in cycles twice per year
    • decision rendered in 3-4 months
  • Formal Review
    • most common and most involved application
    • batched in cycles twice per year
    • decision rendered in around 6 months

In its decision regarding a formal review application, the Cabinet considers:

  • Consistency with the State Health Plan
    • The latest criteria, inventories and need analysis figures maintained by the Cabinet and State Health Plan will be applied at like of public notice of the application
  • Need
    • Demonstrate need in the proposed service area and demonstrate an ability to meet that need
  • Accessibility
    • In terms of timeliness, amount, duration and sufficient personnel
  • Interrelationships and linkages
    • Appropriate and effective linkages with other services, facilities and elements of health care system in the region and state
    • Assurance of effort to achieve comprehensive care, proper utilization of services and efficient functioning of health care system
  • Costs, economic feasibility, and resource availability
    • Economically feasible for the applicant to implement and operate the proposal
    • If proposing more cost effective way to meet the need identified in the application, must demonstrate how it is a more effective and economical use of resources
  • Quality of services
    • Prepared to and capable of undertaking and carrying out the responsibilities involved in the proposal
    • Ability to comply with applicable licensure requirements
  • Special needs and circumstances
  • Community support

Certificate of Need Process Milestones

Formal review projects are grouped by type into batching cycles of review.  Each batching cycle occurs biannually. A formal review follows the process described below.

  1. Letter of Intent
    An applicant may file a letter of intent (LOI) at any time before the batching cycle’s deadline.  The LOI indicates the name of the project, approximate location, nature, scope, projected cost, and timeframe.
  2. Application
    The application deadline is 30 days after the LOI deadline; however, an applicant must wait at least fifteen days after submitting an LOI to submit an application.  The application is 29 pages and has seventeen sections.
  3. Completeness Review
    Within fifteen days of submitting the application, the applicant will receive notice from the Cabinet if additional information is required.  The applicant then has fifteen additional days to submit the requested information.
  4. Public Notice
    A “complete” status applicant may file a public notice on the 3rd Thursday of the specified month.  The public notice date is the official beginning of the formal review period. The Cabinet
  5. Formal Review Hearing
    Any affected person may request a formal review hearing within fifteen days of the public notice announcement.  The hearing is held by hearing officers from the Health Services Administrative Hearings Branch.  Information about the time and place of the hearing is sent to the applicant and affected persons, published in the CON newsletter, and provided to the general public through public information channels at least ten days prior to the hearing.  Each interested party has the opportunity to present its case, call and cross-examine witnesses, and offer documentary evidence.  The Cabinet receives the hearing officer’s decision and forwards it to each party.
  6. Decision
    By the 90th day of the review cycle, the Cabinet renders its final decision. The applicant will receive written notification of the decision within three days. If approved, the notification will include any terms or conditions limiting the certificate of need. Notification of disapproval will include the reasons for the decision and notice of appeal rights.
  7. Reconsideration Request
    Within fifteen days of the Cabinet’s decision, an affected party may request a reconsideration hearing.  Within 30 days of the request, the hearing officer of the earlier hearing or the secretary decides whether to grant reconsideration.  The reconsideration hearing is held within 30 days of the grant, and a final decision is rendered no later than 30 days following the hearing’s conclusion.

Certificate of Need Application Filing Fee

  • Projects with capital expenditures up to $200,000, have a fee of $1,000.
  • Projects with capital expenditures between $200,001 and $5,000,000 carry a fee of 0.5% of expenditures.
  • Projects with capital expenditures over $5,000,000 have a fee of $25,000.

Additional Sources

(links good as of January 2022)

Kentucky Cabinet for Health and Family Services, Division of Certificate of Need
https://chfs.ky.gov/agencies/os/oig/dcn/Pages/cn.aspx

CON Statute
https://apps.legislature.ky.gov/law/statutes/chapter.aspx?id=38238

CON Rules
https://apps.legislature.ky.gov/law/kar/TITLE900.HTM

Kentucky Certificate of Need Newsletter
November 2021
https://chfs.ky.gov/_layouts/download.aspx?SourceUrl=https://chfs.ky.gov/agencies/os/oig/dcn/Certificate%20of%20Need%20Newsletter/NOV2021correctPN.doc

 

Contact RPC Consulting
Should you or your client need an expert team to help you with the Kentucky Certificate of Need (CON) please contact Dr. Ron Luke at 512-371-8166.

Disclaimer: The information on this page has been compiled by RPC in June 2010 and updated in January 2022. Information is based on sources believed to be reliable. Where possible we have had the material reviewed by state CON officials or others knowledgeable of the state’s CON program. The information is not offered as legal advice. A state may change its rules, forms and procedures at any time and RPC offers no assurance that the information will be correct on the date it is viewed. Therefore the reader is urged to use this information only as a starting point for any CON application and to speak with state officials or seek legal or consulting advice early in the process.