Proposed Amendment to NC’s CON Law Would Raise Cost Thresholds, Require Expirations

April 5, 2021Alerts

North Carolina legislators filed another bill to amend the state’s Certificate of Need Act on April 1, 2021.

As filed, Senate Bill 462 would modify several longstanding cost thresholds that trigger CON review:

  • tripling the cost threshold for diagnostic centers from $500,000 to $1.5 million, to be adjusted annually based on changes in the consumer price index
  • raising the cost threshold for major medical equipment from $750,000 to $2 million; to be adjusted annually based on changes in the consumer price index
  • doubling the $2 million general cost threshold for a new institutional health service under N.C. Gen. Stat. § 131E-176(16)b to $4 million, to be adjusted annually based on changes in the consumer price index

The bill also inserts a provision that any CON will expire if construction does not commence within the following time frames:

  • Four years for projects with a capital expenditures over $50 million
  • Two years for projects with a capital expenditures of $50 million or less

Raising the cost thresholds would allow smaller, less expensive projects to proceed without CON review, while still requiring examination of larger, more expensive proposals.

Under current law, a CON does not expire, but the North Carolina Department of Health and Human Services has the authority to revoke a CON if the holder is not making good faith efforts to develop the project. However, delays in the development of CON-approved projects are common and such a revocation is rare.

Legislators have also filed bills to fully repeal the CON Law. Bills filed in the North Carolina Senate and House (S309 and H410) remain pending and are currently in committee.