Since 1973, the state of Tennessee has required that health care providers meet complex Certificate of Need provisions before undertaking major building projects or making major capital improvements. Boult Cummings has a group of Health Care attorneys who focus on representing providers in Certificate of Need (CON) matters, which are administered by the Tennessee Health Services and Development Agency (HSDA).

In Tennessee, a CON can be required for building, modifying or renovating facilities, such as hospitals and nursing homes. It is also required for building facilities that provide certain services - such as burn units, imaging services and outpatient surgery services - or for the acquisition of major medical equipment exceeding $1.5 million.

Our attorneys monitor legislative, regulatory, judicial and administrative developments related to health planning, and we regularly advise clients on CON matters. We represent providers seeking a CON before the HSDA, as well as those who are opposed to the granting of a CON.  In addition, our attorneys handle both administrative and trial court appeals related to the Certificate of Need process.

Experience:

• Advise providers as to the necessity of obtaining a CON for applicable matters, including the structuring of certain transactions to avoid the need for a CON.
• Advise providers as to regulatory compliance necessary to maintain a CON.
• Assist providers in the evaluation of applicable regulatory criteria and standards, and determine, when possible, the likelihood of success when applying for a CON.
• Assist providers in the preparation of an application for a CON, including determination of an appropriate service area and applicable demographics, the assessment of demand in such service area, and the presentation of such information to the HSDA.
• Represent providers before the HSDA, both in the capacity as applicant seeking a CON and as opposition opposed to the granting of a new CON.
• Handle appeals related to the grant of, or denial of, a CON throughout the entire process from administrative hearing to review by the Tennessee Supreme Court.
• Advise lenders with respect to CON matters, including the grant, perfection and foreclosure of a security interest in a CON by a borrower.
• Monitor legislative, regulatory, judicial and administrative developments related to health planning and CONs.
• Advise investors in health care companies which hold CONs in Tennessee as to health planning due diligence and related matters.

General CON Requirements:

• The group of institutions and facilities requiring CONs in Tennessee includes virtually every aspect of the health care industry, as CONs are required for hospitals, nursing homes, ambulatory surgical treatment centers, home care organizations (including home health and hospice), outpatient diagnostic centers and rehabilitation facilities, among others.
• A CON is required for the implementation of certain services, whether at an existing facility or for a new provider, including burn units, neonatal intensive care units, open heart surgery and cardiac catheterization services, positron emission tomography (PET) services, outpatient surgery services, lithotripsy services, magnetic resonance imaging (MRI) services and linear accelerator services.
• A modification, renovation or addition to a hospital in excess of $5 million requires a CON ($2 million for other health care institutions, such as nursing homes and surgery centers), as does the acquisition of major medical equipment which costs more than $1.5 million.
• Any change in the bed complement of a health care institution which increases the total number of licensed beds, redistributes beds from acute to long-term care or certain other categories, or relocates beds to another facility or site, requires a CON, as does a change in the location, or replacement of, an existing facility.
• Certain actions require a notice or prior approval by the HSDA, but not a CON, before such actions may be taken, including the replacement or upgrade of existing major medical equipment and the change of ownership of a health care institution within two years of obtaining its initial license.

Certificate of Need Links of Interest:

• www.ahla.org
• www.state.tn.us/hsda