Connecticut recently enacted sweeping changes to its Certificate of Need (CON) requirements, which mandate that certain health care providers obtain state approval before making major operational or transactional changes, including ownership transfers, service terminations, new facility development, relocations and major equipment acquisitions.
Included in the state’s budget bill, the changes overhaul the Certificate of Need program with the stated goal of reducing the cost and time required to obtain a CON. The legislation takes effect on Oct. 1, 2026, but will generally be implemented July 1, 2027, and includes new oversight, streamlined application deadlines, modified public notice requirements, an expedited review process for some situations, exemptions for some activities, and new rules for service terminations and pauses.
Health care providers must prepare and strategically plan for the significant process changes and understand their impact on desired service changes, facility expansions and relocations, ownership changes and other transactions.
Key Takeaways
- CON authority will shift from the Office of Health Strategy to a new three-member Certificate of Need Panel supported by the Department of Public Health.
- Most operational changes take effect July 1, 2027, although the law becomes effective Oct. 1, 2026.
- The definition of transfer of ownership will be expanded to more clearly capture a broader range of ownership, control and asset transactions.
- Certain service terminations, relocations and other activities will be exempt from CON review, although separate notice and hearing obligations are still required in some circumstances.
- Application timing, public hearing requirements, intervention rights and expedited review procedures will change significantly.
- Large group practice transactions that do not require a CON will have an additional notice obligation.
Activities That Will — and Will Not — Require a CON
Some of the most significant changes address which activities will trigger the need for a CON and which factors the CON Panel will use when evaluating applications. For example, the new law expands CON review to include the closure of hospital satellite facilities.
Under the new law, the following activities are among those that will, or will not, require a CON:
- Change of Ownership: Effective Oct. 1, 2026, the definition of a change of ownership will be expanded, which appears aimed, at least in part, at increasing oversight of complex ownership and control transactions, including transactions involving private equity-backed health care entities. The new definition applies to health care facilities, institutions and large group practices (in certain situations) and includes mergers; transactions transferring 25% or more of assets, equity or voting shares; transfers of control of a board of directors or governing body; and real estate transactions involving 20% or more of total assets of a hospital.
- Service Terminations: Beginning July 1, 2027, termination of certain services, such as surgical services by outpatient surgical facilities, will not require a CON.
- Other Exemptions: Beginning July 1, 2027, some of the newer programs/activities exempted from requiring a Certificate of Need include programs licensed or funded by the Department of Children and Families; nonprofits and state-operated facilities solely providing behavioral health or substance abuse treatment; certain relocations within the same municipality or within 10 miles, provided the relocation does not substantially change the payer mix or patient population served; and group practice-MSO associations without profit sharing.
- Group Practice Transactions: Beginning July 1, 2027, large group practice transactions that do not require a CON will require a notice to be submitted to the CON Program, and the CON Program shall post the required information on its website.
How Applications Will Be Evaluated
The new law transfers CON authority from the Office of Health Strategy to a three-member CON Panel supported by the Department of Public Health. The current Office of Health Strategy CON process will continue to govern applications filed through June 30, 2027. All applications filed on or after July 1, 2027, will be reviewed by the Panel, which will be composed of the Commissioner of Public Health, the Secretary of the Office of Policy and Management and the Commissioner of Social Services. The Panel will also have authority to issue civil penalties, cease-and-desist orders and other enforcement actions. The Department of Public Health will support the Panel by receiving applications, scheduling hearings and carrying out other administrative duties.
The new law streamlines the current 12 CON review factors to focus on access, need, quality and cost. All applications will be evaluated on whether they achieve the following in the applicant’s service area:
- Promote the delivery of high-quality, cost-effective care;
- Promote access to health care services, including for Medicaid beneficiaries;
- Promote the financial stability of the health care system, including whether the proposal is financially feasible to implement and whether the applicant has any prior evidence of financial mismanagement or misconduct;
- Demonstrate a clear public need; and
- Avoid unnecessary duplication of services.
Application and Review Deadlines
Beginning July 1, 2027, CON applications must be submitted by the 15th of each month and will have a rolling monthly deadline. Applicants must submit a brief description of their proposal for the CON Program to post on its website at least 21 days before the application deadline. A new notice is required if the application is not filed within 90 days.
The CON Program must notify the applicant whether the application is complete within 15 days after the deadline. If an application is deemed incomplete, the CON Program must notify the applicant of the additional information needed within five days. The application may then be resubmitted during the next application window or a later application window.
The CON Program will review completed applications and report on how they satisfy the evaluation factors. The report must be issued at least 10 days before any public hearing and no later than 90 days after the application is deemed complete. To compile the report, the CON Program may ask for additional information to supplement the application, but the request cannot delay review deadlines. Any request for additional information must be made no later than 75 days after the application is deemed complete, and the applicant will have 10 days to respond.
Other Key Changes
Several other revisions to the program have been made, including:
- Mandatory Public Hearings: CON applications submitted after July 1, 2027, will require public hearings within 90 days unless the applicant waives the right to a hearing, which will also waive the applicant’s right to appeal the CON Panel’s decision.
- Interveners: Third parties seeking to intervene must file notice of their intent within 20 days after the applicant’s Notice of Intent is posted on the CON website. The applicant will have five days to file an objection to the intervenor, and the CON Program must make a decision within 15 days.
- Expedited review: The CON Panel is required to establish a 60-day expedited review process by Jan. 1, 2028, for applications that include certain facility relocations, equipment acquisitions, operating room and hospital bed additions, or other categories deemed necessary by the Department of Public Health.
- Market Impact Reviews: Market impact reviews will now be required when a hospital/system files a CON application for transfer of ownership, or when a notice of material change is filed with the Attorney General and the purchaser is a for-profit business or the transaction involves a facility/system with more than $1 billion in net patient revenue for fiscal year 2025, regardless of jurisdiction.
- Flexibility on Service Pauses: Beginning July 1, 2027, hospitals can temporarily pause services for 90 days without notifying the CON program. If the hospital plans to pause for longer than 90 days or terminate the service, it must meet a variety of notice requirements, including notifying the CON Program, which will work with the CON Panel to schedule a public hearing.
- Oversight and Penalties: The CON Panel has authority to investigate CON violations and assess civil penalties for failure to comply with CON procedures, rulings or settlements. The maximum penalty is $1,000 per day.
Planning Considerations for Providers
Providers contemplating transactions, relocations, service changes, facility expansions or major equipment acquisitions should factor the new timing, notice and public hearing requirements into their planning. Providers should also assess whether a proposed transaction or operational change may be covered by the expanded transfer-of-ownership definition or eligible for an exemption under the revised CON framework.
Harris Beach Murtha’s Health Care Industry Team has significant experience with the Certificate of Need Program and regularly assists providers with meeting the requirements to obtain approval. If you need assistance determining your obligations under the new law or filing an application for a Certificate of Need, we can assist. Please reach out to attorney Stephanie Sobkowiak at (203) 772-7782 and ssobkowiak@harrisbeachmurtha.com; attorney Julia P. Boisvert at (860) 240-6018 or jboisvert@harrisbeachmurtha.com; or the Harris Beach Murtha attorney with whom you most frequently work.
This alert is not a substitute for advice of counsel on specific legal issues.
Harris Beach Murtha’s lawyers and consultants practice from offices throughout Connecticut in Bantam, Hartford, New Haven and Stamford; New York State in Albany, Binghamton, Buffalo, Ithaca, New York City, Niagara Falls, Rochester, Saratoga Springs, Syracuse, Long Island and White Plains; as well as in Boston, Massachusetts, and Newark, New Jersey.