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OLR Bill Analysis
sHB 5449
AN ACT CONCERNING CERTIFICATES OF NEED.
SUMMARY
This bill addresses matters concerning the state’s certificate of need
(CON) program for health care institutions, which is administered by
the Office of Health Strategy’s (OHS) Health Systems Planning Unit.
Under the CON law, health care facilities (e.g., hospitals, freestanding
emergency departments, and outpatient surgical facilities) must
generally receive state approval when (1) establishing new facilities or
services, (2) changing ownership, (3) acquiring certain equipment, or (4)
terminating certain services.
Primarily, the bill does the following:
1. prohibits a health care provider from breaking ground on a new
or expanded facility unless OHS has approved a CON;
2. increases the CON application fee from $500 to a range of $1,500
to $25,000 depending on the proposed project’s cost;
3. prohibits the Connecticut Health and Educational Facilities
Authority (CHEFA) from issuing a bond to a health care provider
who needs an approved CON for a new or expanded facility
unless CHEFA has reviewed a capital budget with
recommendations from OHS;
4. requires OHS, when making recommendations to CHEFA, to
assess the capital budget’s reasonableness and the projected
impact to the area’s health care market and pricing; and
5. requires OHS to study the state’s CON program and submit a
report to the Insurance and Real Estate Committee by January 15,
2023, with recommendations on specified matters. 2022HB-05449-R000343-BA.DOCX
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EFFECTIVE DATE: Upon passage, except the application fee and
CHEFA-related provisions are effective October 1, 2022.
APPLICATION FEE
The bill increases the CON nonrefundable application fee from $500
to a range of $1,500 to $25,000 depending on the proposed project’s cost,
as shown in Table 1 below.
Table 1: CON Application Fees under the Bill
Application Fee Project Cost
$1,500 Up to $50,000
$2,500 >$50,000 and up to $100,000
$5,000 >$100,000 and up to $500,000
$10,000 >$500,000 and up to $1 million
$15,000 >$1 million and up to $5 million
$20,000 >$5 million and up to $10 million
$25,000 >$10 million
OHS CON STUDY
Under the bill, OHS must study the state’s CON program and submit
a report to the Insurance and Real Estate Committee by January 15, 2023.
The report must consider and make recommendations on the following:
1. instituting a price increase cap tied to the cost growth benchmark
for consolidations,
2. guaranteeing local community representation on hospital
boards,
3. changing OHS’ long-term statewide health plan to include an
analysis of services and facilities and their impact on equity and
underserved populations,
4. setting standards for measuring quality as a result of a
consolidation,
5. enacting higher penalties for noncompliance and increasing 2022HB-05449-R000343-BA.DOCX
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enforcement staff;
6. the attorney general’s authority to stop activities as a result of a
CON application or complaint,
7. the ability of workforce and community representatives to
intervene or appeal decisions,
8. giving OHS authority to require an ongoing investment to
address community needs, and
9. capturing lost property taxes from hospitals that have converted
to nonprofit entities.
COMMITTEE ACTION
Insurance and Real Estate Committee
Joint Favorable Substitute
Yea 17 Nay 0 (03/22/2022)