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  2. Certificate of Need Program

Certificate of Need Program

Background

The Health Facilities Planning Act (Act) (20 ILCS 3960), established Illinois’ certificate of need (CON) program. The CON program promotes the development of a comprehensive health care delivery system that assures the availability of quality facilities, related services, and equipment to the public, while simultaneously addressing the issues of community need, accessibility, and financing. In addition, it encourages health care providers to engage in cost containment, better management and improved planning.

The Act established the Health Facilities Planning Board (since renamed the Health Facilities and Services Review Board (Board)) which issues permits for construction or modification projects proposed by or on behalf of healthcare facilities, and for the acquisition of major medical equipment. To obtain a permit, a person must justify that a proposed project is needed and financially and economically feasible, in addition to satisfying other criteria as established in the Board Administrative Rules. Included in the application review is the opportunity for public comments and a public hearing that provides for community input into the process.

The Board also issues exemptions.  Projects eligible for exemptions are the closure of a health care facility, the discontinuation of a category of health care service, and the change of ownership of a health care facility.  As with permits, the community has the opportunity to provide input by submitting written public comments or participating in a public hearing on the project.  Exemptions are not based on need.

The Board is an independent nine-member commission appointed by the Governor with Senate confirmation. The Secretary of the Illinois Department of Human Services and the Directors of the Illinois Department of Healthcare and Family Services and Department of Public Health serve as ex-officio non-voting members. The issuance of a permit requires a affirmative votes from a majority of voting members.  The Illinois Department of Public Health’s Division of Health Systems Development provides primary staff support for the Board.

Coverage

Entities subject to the Act include licensed and state-operated facilities, including: hospitals; long-term care facilities; dialysis centers; ambulatory surgery centers; alternative health care delivery models; freestanding emergency centers; and birthing centers. Facilities operated by the federal government are not subject to the Act.

Projects require either a permit or an exemption to proceed.  Transactions requiring a permit include constructions or modifications by or on behalf of a health care facility that exceed the capital expenditure minimum threshold for that type of facility.  As of July 1, 2016, the capital expenditure minimums are $12,950,881 for hospitals; $7,320,061 for long-term care facilities; and $3,378,491 for all other applicants. The same thresholds apply to the acquisition and housing of major medical equipment.  Other projects which require a permit are the addition of a new category of service; a substantial increase in a facility’s bed capacity; and a substantial change in the scope or functional operation of a facility.

Projects which require an exemption include: the closure of a health care facility*^; the change of ownership of a health care facility; and the discontinuation of a category of health care service.

* Long-term care facilities are not required to obtain a permit or exemption when closing or undergoing a change in ownership.  These transactions, however, must be reported to the Board.

^ State-maintained health care facilities, including long-term care facilities, must seek a permit prior to closing.  These closures are not eligible for an exemption.