Mid-Atlantic Health Law TOPICS

The Maryland Health Care Commission (MHCC) recently sent the General Assembly a report containing a list of 14 recommendations to modernize and improve the Certificate of Need (CON) process for establishing and expanding health care facilities in Maryland. 

The CON process requires that certain health care facilities or services only be developed, improved or expanded if there is a need. However, the CON process can also be very expensive and time-consuming. 

In 2017, recognizing that Maryland’s all-payer model of hospital reimbursement is changing the delivery of health services in the State, and that “the CON approval process is complicated and may be an administrative burden, particularly for hospitals,” the General Assembly asked the MHCC to undertake a comprehensive review of the CON application requirements and processes.

The Final Report

The Final Report, titled “Modernization of the Maryland Certificate of Need Program” was issued on December 20, 2018, and is the culmination of more than a year’s work by a task force comprised of stakeholders from various types of facilities subject to the CON process.

In the Final Report, the MHCC recommends the elimination of two out of six CON review criteria from the State Health Plan standards, namely the criteria pertaining to the evaluation of cost-effective alternatives and compliance with previous CONs. The MHCC recommends limiting CON review to those standards addressing project need, viability, impact and applicant qualifications, and that any other standard should only be included if absolutely necessary based on the particular characteristics of a health care facility. 

The MHCC is also recommending the creation of an abbreviated CON review process for uncontested projects that do not involve the establishment or relocation of a health care facility or a hospital’s introduction of a cardiac surgery or organ transplantation program. If adopted, this could significantly streamline the CON process for uncontested projects.

Another recommendation would allow project completion deadlines to be more flexible for projects involving construction. 

The MHCC also considered areas of potential regulatory duplication with the Health Services Cost Review Commission (HSCRC) and recommended creating the ability to waive CON docketing requirements or other limitations on a capital project that is approved by the HSCRC as a viable approach for reducing the total cost of care. 

The MHCC also identified areas of further study regarding potential approaches for reforming the CON process, from which additional recommended statutory or regulatory changes may emerge.

Next Steps

The MHCC’s recommendations will take time to be considered and implemented. Some may be implemented through the MHCC’s own regulatory process of amending the State Health Plan, while some will require legislation to change the MHCC’s governing laws.

For facilities subject to the CON process and other stakeholders, however, there is hope that the CON process will become simpler and more streamlined at some point in the not too distant future.

Barry F. Rosen
410-576-4224 • brosen@gfrlaw.com