New York Adopts Certificate of Need Amendments to Streamline Reviews of Health Facility Projects

The New York State Department of Health (the Department) adopted amendments to its Certificate of Need (CON) regulations at Part 710 of Title 10 of the New York Codes, Rules and Regulations (NYCRR) to update, modernize and streamline the CON review process for health facility construction projects. Specifically, the amendments repeal and replace 10 NYCRR § 710.1 to increase the overall total project cost (TPC) thresholds that generally determine the level of review for projects and revise applicable review levels “to reflect the advances and evolving trends in healthcare.” The amendments are intended to avoid “unnecessary levels of review,” “reduce red tape and approval times” and “continue to reflect the overall objective of the statutory and regulatory framework.” 

Key Changes to Certificate of Need Review Thresholds and Processes

Below is a high-level summary of the key changes to the CON review thresholds and processes. For a more thorough review, please consult the Department’s published guidance document (the Guidance Document), or the regulations themselves. 

Proposals Requiring Full Review

• Any proposal involving TPCs in excess of:
  • $60 million (up from $30 million) or 10% of a facility’s operating costs, not to exceed $150 million for a general hospital or
  • $20 million (up from $15 million) or 10% of a facility’s operating costs, not to exceed $30 million for all other facilities subject to a CON review
• The addition of beds totaling more than 10% of current beds or the conversion of more than 10% of current beds to a bed type of a higher level of care, regardless of cost
• Any proposal for the addition or modification of Lung Transplantation Services, or the initial acquisition of any related equipment, regardless of cost. Lung Transplantation Services were added while several other services have been removed, including Therapeutic Radiology, Cardiac Catheterization, Bone Marrow Transplantation, Burn Care, Acquired Immune Deficiency Syndrome centers and Epilepsy services. 

Proposals Eligible for Administrative Review

• Any proposal involving TPCs in excess of:
  • $30 million (up from $15 million), but not exceeding the greater of $60 million, or 10% of a facility’s operating costs, not to exceed $150 million for a general hospital or
  • $8 million (up from $6 million), but not exceeding the greater of $20 million, or 10% of a facility’s operating costs, not to exceed $30 million for all other facilities subject to a CON review
• Any proposal/project funded primarily through state-awarded grants
• The amendments also removed references to specific services, including but not limited to: Diagnostic Cardiac Catheterization service; changes in bed capacity at an acquired immune deficiency syndrome center; addition of skilled nursing facility beds for individuals with acquired immune deficiency syndrome; acquisition of MRI machines; addition of adult day health care services; and acquisition of CT scanners 
• Projects involving Emergency Room space no longer require Administrative Review

Proposals Eligible for Limited Review

• Any proposal where the TPC does not exceed $30 million (up from $15 million) for a general hospital, or $8 million (up from $6 million) for all other facilities subject to a CON review
• Any proposal to operate a mobile van extension clinic
• Cardiac catheterization proposals no longer require Limited Review but will now be assigned a review level under general provisions depending on TPC thresholds and impact on the facility’s operating certificate

Proposals That Only Require Written Notice to the Department

• Any proposal involving a non-clinical project with TPCs in excess of $12 million (up from $6 million)
• Any proposal for the addition or renovation of examination rooms in facilities where such space already exists within or adjacent to previously certified space regardless of TPCs
• Any proposal that is otherwise eligible for Limited Review (i.e., where the TPC does not exceed $30 million), but is architecturally self-certified by the applicant, as long as it does not involve a change in the beds or services which would require an update to the applicant’s operating certificate

Practical Considerations

While the Department published the Guidance Document to serve as an overview of the amended regulation and cover most general circumstances, the Department cautions “there may be unique factors in any [CON] application that will require reference to the regulation itself for final determination on the required level of review.” New York’s health facilities should review the new requirements before beginning any construction or renovation projects to ensure compliance and consult the Department with any questions. 

Questions may be submitted to CONS@health.ny.gov. The Health Law Observer will continue to monitor and provide updates on the implementation of these amendments in the coming months.