Certificate of Need Program

Certificate of Need (CON) programs are utilized by 35 states to help maintain quality of care, control a portion of the health care costs of communities, and promote rational distribution of certain health care services. CON requires that individuals or health care facilities seeking to initiate or expand services submit applications to the State. Approval must be obtained before initiating projects that require capital expenditures above certain dollar thresholds, introduce new services, or expand beds or services. Montana's CON program has existed since 1975. Currently, the Program is organized within the Licensure Bureau of the Office of Inspector General of the Department of Public Health and Human Services.

State Health Care Facilities Plan

The Montana Health Care Facilities Plan was written to meet the requirements of the Montana Certificate of Need (CON) law. The plan provides projections of need and guidance in determining need for health care facilities and services covered by the CON law. The plan should be used as a guideline along with more recent data or additional information, when available, in the review of CON applications.

Here are the current State Health Care Facilities Plan components:

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What Are CON's Benefits?

The benefits of CON can reach beyond the issues of cost containment and service distribution:

  • CON helps to ensure appropriate quality and distribution of services, allowing health care providers to maintain sufficient manpower to deliver high quality care.
  • CON encourages health care facilities/providers to develop long-range operational and capacity plans based on local community health care needs.
  • CON requires consideration of personnel and financial feasibility as well as need.
  • CON encourages the development of affordable and accessible health services to all areas of the state.
  • CON encourages the consideration of more cost-effective strategies through the review of alternative services.
  • CON promotes the sharing of services, especially in rural areas, where operational and administrative costs can threaten facility survival.
  • CON offers a forum for public input and community involvement prior to the establishment of facilities and services.

Anyone interested in completing a CON application must refer to the laws, rules, and guidelines pertaining to CON. These include:

  • Montana Code Annotated (MCA) 50-5-301-310;
  • Administrative Rules of Montana (ARM) 37.106.101-140;
  • The Current State Health Care Facilities Plan (SHCFP).

Not all health care facilities or services are reviewable for Certificate of Need. The facilities and services subject to review include:

  • Ambulatory surgical facilities proposed for counties with populations less than 20,000
  • Home health agency services
  • Inpatient chemical dependency facilities
  • Intermediate care facilities for persons with intellectual disabilities or developmental disabilities (ICFs/MR or DD)
  • Nursing home services and Long Term Care facilities

Reviewable or Not?

Reviewable projects primarily involve large capital expenditures or expansions in bed capacity or services by the types of facilities previously listed above. Projects that require CON review include:

  • Capital expenditures over $1,500,000.
  • Changes in bed capacity of a facility through an increase in number, or relocation, of beds.
  • Addition of health services associated with annual operating expenses of $150,000 or more.
  • Construction, development, or establishment of a facility
  • Establishment of a home health agency or expansion to another service area.
  • Use of hospital beds (more than five) to provide skilled nursing care (swing beds).

Some projects may be non-reviewable, and may forego the full CON review. If the facility informs the Department of its intentions in advance. For example, with a letter of intent:

  • Initial establishment of five or fewer swing beds is non-reviewable.
  • Addition of ten beds, or 10% of licensed beds, whichever is less, is non-reviewable (provided there has been no change to the facility's license in two years).
  • Changes of ownership are non-reviewable (with notification 30 days ahead of transaction).

WITHOUT PROPER NOTIFICATION, THESE "NON-REVIEWABLES" CAN BECOME REVIEWABLE.

Any health care facility considering development is advised to contact the CON Program BEFORE proceeding with the project, to determine if the project is reviewable.

In addition, we recommend that CON applicants consult with the Department's Licensure and Certification Bureaus to ensure compliance with other state and federal standards.

How Does the Process Work?

Generally, CON reviews take at least six months to complete, and follow the process below:

  • An applicant files a Letter of Intent (LOI), declaring their intent to submit an application for the proposed project.
  • The Department publishes a list of all Letters of Intent received during the preceding calendar month on the 10th of every month in the nearest newspaper(s) for which an LOI has been filed.
  • Anyone may submit a competing LOI within thirty days after newspaper publication.
  • After thirty days, the Department notifies the applicant(s) of the deadline for submission of application(s), giving each applicant 90 days.
  • The applicant may submit the application anytime within the deadline period. Along with the application, the applicant must pay the required fee ($500 or 0.3% of the project's capital expenditure, whichever is greater).
  • The Department's 90-day decision deadline begins upon receipt of an application and fee. In comparative reviews, the decision deadline period begins upon receipt of the last application and fee.
  • The Department determines if an application contains the required information, and can ask additional questions if necessary.
  • Public informational hearings may be held within the Department's 90-day decision period.
  • The Department renders a decision by the 90th day; affected parties then have 30 days to request a reconsideration of the decision.