A Certificate of Need (CON) is a state-issued approval that a healthcare facility must obtain before undertaking certain capital projects — most relevantly for research and clinical labs, before acquiring specified major medical equipment, adding beds, opening a new facility, or offering a new service. CON review exists to prevent unnecessary duplication of costly healthcare resources and, in principle, to hold down healthcare costs by requiring an applicant to demonstrate that a community actually needs the proposed capacity before it’s built or bought.
For labs and imaging departments, CON law matters most as a procurement gate: in states that regulate major medical equipment, you cannot simply purchase and install an MRI, CT, PET scanner, linear accelerator, or cardiac catheterization system above a state-set threshold without first securing CON approval (or confirming your project is exempt). Skipping this step can mean a purchase that can’t legally be installed, licensed, or reimbursed.
What Is a Certificate of Need (CON)?
CON programs originated with the federal Health Planning Resources Development Act of 1974, which required states to adopt CON review as a condition of certain federal health funding. Congress repealed the federal mandate in 1986, but most states kept their own CON statutes on the books, and several still actively enforce them today.
Operationally, a CON program works like a zoning permit for healthcare capacity: a hospital, imaging center, ambulatory surgery center, or other regulated provider that wants to add a defined category of service, bed, or piece of major equipment must first file an application with a state health planning agency, department of health, or CON review board. The agency evaluates the application against published criteria — typically projected community need, existing capacity in the service area, financial feasibility, and the project’s likely effect on healthcare costs — before issuing (or denying) the certificate. Only after approval can the applicant lawfully proceed with the purchase, construction, or new service line.
Which States Currently Have CON Laws
CON regulation is a state-by-state patchwork, not a uniform national rule, and the list of participating states has shrunk gradually since the 1986 federal repeal. According to the National Conference of State Legislatures (NCSL), which maintains the most current public tracker of CON law by state, roughly three dozen states plus the District of Columbia still operate an active CON program, while a dozen states have fully repealed or allowed their programs to expire — New Hampshire, the most recent to do so, eliminated its program in 2016.
Because both the list of participating states and the specifics of what each one regulates change over time (state legislatures periodically narrow, expand, or eliminate their programs), always confirm current status directly with the relevant state health planning agency, or via NCSL’s state-by-state CON summary, before relying on any state’s inclusion or exclusion as fact for a specific procurement decision.
What Equipment and Services Typically Trigger CON Review
States that regulate equipment (not every CON state does) most commonly list some or all of the following as CON-triggering acquisitions once they exceed a state-defined cost threshold:
- MRI scanners
- CT scanners
- PET scanners (and combined PET/CT systems)
- Linear accelerators and other radiation therapy equipment
- Cardiac catheterization equipment and labs
Beyond equipment, most CON states also regulate bed additions, new hospital or nursing-facility construction, ambulatory surgery center licensure, organ transplant programs, and certain new clinical service lines. The specific list, the dollar threshold that triggers review, and which facility types are exempt (physician-office-based imaging is exempt in some states, for example) vary considerably by state — there is no single national threshold. A lab or health system planning a major equipment purchase should check the specific equipment list and dollar threshold published by its state’s CON agency rather than assume a rule from one state applies elsewhere.
Certificate of Need in Kentucky
Kentucky is one of the states that has retained an active, comparatively broad CON program, administered through the Kentucky Cabinet for Health and Family Services. Kentucky’s program is frequently referenced in national CON discussions because it regulates a wider range of services and equipment categories than many other remaining CON states. As with any state, the exact scope, thresholds, and exemptions are set in Kentucky’s own statute and administrative regulations and are periodically revised — confirm current requirements directly with the Cabinet’s Office of Health Policy (Certificate of Need program) before relying on any secondhand summary for a specific project.
How the CON Application and Review Process Generally Works
While mechanics differ by state, most CON reviews follow a broadly similar sequence:
- Determine applicability. Confirm whether your planned purchase, service, or facility change falls under your state’s regulated categories and exceeds its cost or capacity threshold. Many states publish a formal “letter of non-reviewability” or exemption process for borderline cases — use it rather than guessing.
- File the application. Applications typically require a detailed project description, cost projections, a needs analysis or utilization projection for the service area, and evidence of financial feasibility.
- Public notice and comment. Most states publish pending applications and allow a comment period; competing providers or community members can formally object, which is a common and expected part of CON proceedings.
- Agency review and decision. The reviewing agency evaluates the application against its published criteria (need, cost impact, quality, accessibility) and issues an approval, denial, or approval with conditions.
- Appeal, if applicable. Denied applicants, and sometimes objecting competitors to an approval, generally have a state-defined right to administrative or judicial appeal.
Review timelines vary widely by state and by project complexity — some routine applications clear in a few months, while contested reviews involving appeals can take a year or more. Build CON review time into any capital equipment procurement timeline in a regulated state; it is not something that can be compressed by moving faster on the purchasing side alone.
Why This Matters for Lab and Imaging Procurement
For a hospital-based, health-system, or academic-medical-center lab planning a capital equipment purchase, CON status is a threshold question that belongs at the very start of the procurement process, not something to check after a vendor contract is already signed. Practical implications:
- Sequencing. In a regulated state, CON approval (or a confirmed exemption) generally needs to be secured before finalizing a purchase order or installation timeline for covered equipment — vendors and capital-planning teams should build the review window into the project schedule.
- Budget and financing. CON applications typically require documented financial feasibility, which means capital budgeting and the CON application need to be developed together, not sequentially.
- Site and ownership structure matter. The same piece of equipment can be exempt in one setting (e.g., some states exempt physician-office imaging) and regulated in another (a hospital-owned or hospital-affiliated site) — confirm applicability for the specific ownership and site structure, not just the equipment type.
- Multi-state systems. Health systems and academic medical centers operating across state lines cannot assume a single CON strategy works everywhere — each state’s program, thresholds, and exemptions must be checked independently.
This sits alongside other pre-purchase and post-purchase compliance questions labs already have to manage — for example, whether to buy new or refurbished equipment, how to structure a lease versus purchase decision, and how equipment gets handled at the end of its life (see equipment disposition when a lab closes). CON adds a distinct, state-regulatory layer on top of those operational and financial decisions — it does not replace them.
The Debate Over CON Laws
CON regulation remains genuinely contested in health policy. Supporters argue it restrains unnecessary duplication of expensive equipment and facilities, which can otherwise drive up costs across a service area. Critics — including federal antitrust regulators, who have periodically raised competition concerns about CON programs — argue that CON review can protect incumbent providers from competition, slow access to care, and add administrative cost without reliably lowering prices. This debate is part of why the list of CON states has continued to shrink since the 1986 federal repeal, with several states repealing or narrowing their programs in recent years while others have retained or even expanded theirs. Because the policy landscape is genuinely in flux, don’t treat any single year’s list of CON/non-CON states as permanent.
Frequently Asked Questions
What is a Certificate of Need?
A Certificate of Need is a state government approval required, in states that regulate it, before a healthcare facility can undertake certain capital projects — commonly adding beds, building or expanding a facility, offering a new regulated service, or acquiring specified major medical equipment above a state-set cost threshold. The applicant must demonstrate the project meets the state’s published need criteria before proceeding.
What are Certificate of Need laws?
Certificate of Need laws are the state statutes and regulations that establish CON review — defining which projects, services, and equipment purchases require prior state approval, what criteria an application is judged against, and what the review and appeal process looks like. Because they’re set at the state level, CON laws vary considerably from state to state; some states have repealed theirs entirely.
Does Kentucky have a Certificate of Need law?
Yes. Kentucky retains an active CON program administered by the Kentucky Cabinet for Health and Family Services, and it is generally regarded as one of the broader-scope remaining CON programs nationally. Confirm the current list of regulated services, equipment categories, and thresholds directly with the Cabinet, since state programs are periodically revised.
Do all states require a Certificate of Need?
No. CON review is not a federal requirement — Congress repealed the federal CON mandate in 1986 — so whether a project needs one depends entirely on the state. A majority of states still operate some form of CON program, but roughly a dozen states have fully repealed theirs, and the regulated categories differ significantly among the states that kept CON review.
Does buying an MRI or CT scanner always require a CON?
Not always — it depends on the state, the setting (hospital-affiliated versus independent physician office, in some states), and whether the purchase price exceeds that state’s equipment threshold. In states that don’t regulate equipment at all, or where the specific purchase falls under the threshold or qualifies for an exemption, no CON is required. Always verify applicability with the specific state’s CON agency before assuming either way.
Key Takeaway
Certificate of Need status is a threshold compliance question, not a formality, for any lab or health-system procurement team planning to acquire major imaging or treatment equipment. Confirm your state’s current CON status, the specific equipment and dollar thresholds it regulates, and whether your planned purchase or facility qualifies for an exemption — early enough in the procurement timeline that CON review (if required) doesn’t become the critical path.
