Connecticut Certificate of Need: Process, Fees, and Penalties

Connecticut’s Certificate of Need requirements apply to most significant healthcare projects in the state, including new facilities, service closures, ownership transfers, and major equipment purchases. The program is administered by the Office of Health Strategy (OHS) under Connecticut General Statutes section 19a-638, and a project that falls within its scope cannot proceed until OHS issues approval. Knowing whether your project triggers the requirement, and what the review will involve, is the first step in planning any healthcare investment in the state.

Projects That Require a Certificate of Need

Section 19a-638 lists the specific actions that cannot proceed without CON approval. The list reaches further than many providers assume, covering not only new construction but also closures, ownership changes, and equipment purchases.

Opening a new health care facility that meets the statutory definition.
Selling or otherwise transferring ownership of a health care facility, and transferring ownership of a large group practice to an entity other than an independent physician or physician group.
Establishing a freestanding emergency department outside an existing hospital campus.
Opening a new ambulatory surgery center or hospital-based outpatient surgery department.
Establishing cardiac catheterization, interventional cardiology, or cardiovascular surgery programs.
Acquiring CT scanners, MRI machines, PET scanners, PET-CT scanners, or nonhospital-based linear accelerators. Replacing a previously approved scanner with a comparable unit is generally exempt.
Adding licensed beds to an existing facility.
Terminating services. Hospitals that want to shut down inpatient or outpatient services, including mental health and substance abuse programs, must go through the CON process. The same applies to closing an emergency department or ending surgical services at an outpatient surgical facility.

That last category surprises many providers. Connecticut’s CON program does not just regulate growth; it also regulates contraction. A hospital cannot quietly eliminate a service line without state review.¹

Projects That Are Exempt

Not every healthcare project triggers a CON requirement. Section 19a-638(b) carves out a long list of exemptions. If a project fits one of these categories, months of regulatory process can be avoided.

Any health care facility owned and operated by the federal government.
A licensed provider opening a solo or group practice office, unless the office involves outpatient surgery, certain imaging equipment, or a large group practice transfer.
Assisted living services agencies, home health agencies, and hospice programs.
Outpatient rehabilitation facilities and outpatient chronic dialysis services.
School-based health centers, federally qualified health centers, and free clinics as defined in state law.
Facilities operated by religious groups that rely exclusively on prayer for healing.
Replacing a previously approved scanner or linear accelerator with a comparable unit, including dual-modality replacements where the applicant already offers similar imaging services.
Nonprofit providers with state agency contracts for services that would otherwise need CON approval. This exemption does not extend to short-term acute care hospitals or children’s hospitals.

The exemptions concentrate oversight on hospitals, surgical centers, and high-cost equipment while leaving lower-acuity settings like home health and hospice free to operate without state approval.²

How OHS Evaluates Applications

Once an application is filed, OHS reviews it against twelve statutory criteria in section 19a-639. These are specific factors the agency must address in written findings for every application.

Public need. The applicant must show a clear public need for the proposed facility or service, identify the population to be served, and demonstrate that existing providers are not already meeting that demand.
Financial feasibility. The proposal must be economically viable for the applicant without undermining the financial health of the broader healthcare system in the state.
Quality and access. The applicant must demonstrate that the project will improve quality, accessibility, and cost effectiveness of care, with specific attention to access for Medicaid recipients and uninsured patients.
No unnecessary duplication. The project cannot simply replicate services that already exist or have already been approved in the same service area.
Provider diversity and patient choice. The proposal must not reduce the diversity of healthcare providers or limit patient choice in the geographic region.
Consolidation effects. For mergers and acquisitions, the applicant must show that consolidation will not drive up costs or reduce access to care.

OHS also considers the applicant’s track record with Medicaid patients. A provider that has previously reduced access for Medicaid recipients or indigent patients must demonstrate good cause for doing so, and differences in reimbursement rates alone are not considered sufficient justification.³

The Application Process, Fees, and Timeline

The CON process begins with a Letter of Intent (LOI) submitted to the reviewing agency. Depending on the project, the LOI may trigger notification requirements. Nursing homes and residential care homes, for example, must notify the Office of the Long-Term Care Ombudsman, inform patients and families in writing, and post a public notice at the facility.⁴

After the LOI is reviewed and a CON application is deemed necessary, the applicant receives the application form and has 180 days to file it. Missing that deadline means the application is considered withdrawn, and the provider has to start over with a new LOI.⁴

Application Fees

Application fees scale with the estimated cost of the proposed project:

Under $50,000: $1,000
$50,000 to under $100,000: $2,000
$100,000 to under $500,000: $3,000
$500,000 to under $1 million: $4,000
$1 million to under $5 million: $5,000
$5 million to under $10 million: $8,000
$10 million or more: $10,000

The fee schedule tops out at $10,000, so a hospital system planning a $50 million expansion pays the same fee as one planning a $10 million project.⁵

Review Tracks

OHS uses different review tracks depending on the scope of the project. Standard applications go through a full review that may include a public hearing. The agency also offers a determination track for certain projects and an emergency CON application for situations requiring faster turnaround. For batch-reviewed applications like certain bed terminations, the application must be deemed complete by March 15 or September 15 to be included in the current review cycle.⁴

Hospital Ownership Transfers Face Extra Review

Ownership changes in Connecticut’s hospital sector face layered regulatory scrutiny that goes beyond the standard CON process. When a nonprofit hospital is acquired by another entity and remains nonprofit after the transaction, the deal goes through the CON approval process under section 19a-638.⁶

When a nonprofit hospital transfers a material amount of its assets or operations to a for-profit entity, or changes control of operations to a for-profit, a separate approval track applies under section 19a-486. That track requires approval from both the Attorney General and the Department of Public Health Commissioner before the deal can close.⁶

The CON review criteria for hospital ownership transfers also include additional factors beyond the standard twelve. The applicant must show it fairly considered alternative proposals with an eye toward maintaining provider diversity and consumer choice in the market.³

Penalties for Proceeding Without a CON

Skipping a required CON carries real financial risk. Under recent legislative changes, a provider or facility that negligently fails to seek CON approval when required faces civil penalties of up to $1,000 per day. That threshold was lowered from the previous standard, which required the state to prove the violation was willful. Under the current standard, negligence is enough.⁷

When OHS has a reasonable belief that a violation has occurred, it issues a notice describing the alleged violation and gives the recipient 10 business days to request a hearing. Failing to comply with an agreed settlement also now carries potential civil penalties. The shift from willful to negligent means a provider can no longer defend itself simply by claiming it did not realize a CON was required.

1
Justia Law. Connecticut Code Title 19A – Section 19a-638
2
FindLaw. Connecticut General Statutes Title 19A – Section 19a-638
3
Justia Law. Connecticut Code Title 19A – Section 19a-639
4
CT.gov. Certificate of Need (CON)
5
CT.gov. CON Form and Fees
6
CT.gov. Hospital Mergers, Acquisitions and Compliance
7
Harris Beach Murtha. Changes on the Horizon in the Connecticut Certificate of Need Process