Certificate of Need: How the Approval Process Works, and What Pennsylvania Gave Up

Pennsylvania dissolved its Certificate of Need program decades ago — understanding why that matters starts with knowing what CON review actually does.

What CON Review Is, and Where Pennsylvania Stands

A Certificate of Need law requires hospitals, nursing facilities, or other healthcare providers to obtain state approval before opening a new facility, adding major services, or making large capital expenditures. The rationale is supply-side regulation: prevent expensive duplication of services, protect rural facilities from being cherry-picked out of viability, and keep costs down for payers and patients alike.

Pennsylvania repealed its CON program in 1996, placing it among the minority of states that have dismantled these frameworks since federal requirements were lifted in 1987. Today, roughly 35 states and Washington, D.C. retain some form of CON or similar review. States like Connecticut and Massachusetts maintain robust CON programs; others, including Pennsylvania, rely on market forces instead.

How a Typical CON Process Works

In states that still operate CON programs, the application process generally follows a defined sequence. A provider files a formal application with the designated state agency — often a health planning board or the state health department — describing the proposed project, its projected cost, the population it will serve, and its alignment with the state health plan.

In states that still operate CON programs, the application process generally follows a defined sequence.

The reviewing agency then evaluates the application against established criteria. These typically include demonstrated community need (often measured against utilization benchmarks and population data), the financial feasibility of the project, the applicant's quality record, and the likely effect on existing providers in the region. Competing providers may intervene and submit opposing evidence, making CON proceedings quasi-judicial in some states.

Public comment periods and hearings allow community members and rival facilities to weigh in. Final decisions can be appealed. The entire process can take several months to well over a year for large projects.

The Pennsylvania Calculus

Without CON review, Pennsylvania relies on licensure, certificate-of-compliance requirements, and market competition to shape where and how healthcare capacity grows. Critics of that approach argue it accelerates consolidation¹ — particularly in specialties like anesthesia — and leaves rural hospitals like Lewistown Hospital vulnerable when profitable service lines migrate to suburban competitors. Supporters counter that deregulation lowers barriers for new providers and reduces administrative costs.

The Pennsylvania Department of Health ↗ retains licensure authority over facilities, but that is a floor of minimum standards, not the supply-management tool CON represents. Whether the Commonwealth should revisit CON — especially as health system consolidation accelerates across the state — is a live debate in Harrisburg policy circles.