Certificate of Need
What is a Certificate of Need?
The Certificate of Need (CON) program is intended to ensure access to high quality health care services while restraining costs. In Michigan, a Certificate of Need must be granted before anyone can begin operating, expand, relocate, or acquire any of the following:
- Air Ambulance (Helicopter)
- Bone Marrow Transplants
- Cardiac Catheterization (Including Primary PCI and Elective PCI)
- Computed Tomography (CT)
- Heart, Lung, Liver Transplants
- Hospital Beds
- Magnetic Resonance Imaging (MRI)
- Megavoltage Radiation Therapy (MRT)
- Neonatal Intensive Care Unit (NICU)/Special Care Nursery
- Nursing Home/Hospital Long-Term Care Unit Beds
- Open Heart Surgery
- Positron Emission Tomography (PET)
- Psychiatric Beds (Acute Inpatient)
- Surgical Services
- Urinary Lithotriptors
In addition, if a licensed health care facility expends more than $3,735,000 (adjusted annually based on the CPI) on clinical space or fixed equipment, a “capital expenditure threshold” CON must be obtained even if it is not related to one of the specific covered clinical services or beds.
Certificate of Need Application Process
Letter of Intent
The Certificate of Need (CON) application process begins with filing of a Letter of Intent (LOI) with the Michigan Department of Health and Human Services (MDHHS).
The LOI contains the basic information of what is being proposed, including the following :
- applicant’s name and address
- location where the covered service/beds will be located
- what the applicant is requesting (number of beds, type of service, etc.)
- an estimated budget and how it will be paid for
MDHHS must process the LOI within 15 days from submission. Once processed, they will provide the applicant with a CON application number and assign the required forms and information that must be included in the application.
Once a CON number is assigned, a processed LOI is valid for up to one year. If no application is filed within one year, the LOI must be resubmitted. If MDHHS determines that the proposed project does not require a CON application, the Department will issue a waiver letter indicating no CON is required.
Certificate of Need Application
Once MDHHS has processed the Letter of Intent (LOI), the Certificate of Need (CON) application must be drafted and submitted. The application includes detailed information about the project including:
- financial projections,
- documentation to support project costs, such as vendor quotes and lease proposals,
- documentation to prove that funding for the project is available, and
- documentation to show that the project meets the requirements of the relevant CON review standards.
Upon filing the application, MDHSS reviews it for completeness. If they determine any items are missing, they will request those items within 15 days of receipt of the application and allow 15 days to respond with the information.
Once the information is received, the application is deemed complete and MDHHS begins its review.
Three Types of Certificate of Need Applications
1. Comparative Review
- beds (hospital, nursing home, and psychiatric)
- services that are limited by the number allowed in the state or a planning area (transplantation services)
These applications must be filed on the first business day of February, June, and October and take up to 150 days to review.
2. Non-Substantive Review
Projects whose costs do not exceed the capital expenditure threshold and fall within the following categories qualify for non-substantive review:
- lease renewals
- mobile host site initiations for CT, PET, and lithotripsy services
These applications can be filed at any time following LOI processing and take up to 45 days to review.
3. Substantive Review
Projects that do not qualify for non-substantive review or comparative review are subject to substantive review. Typically this includes initiations of new services and expansions of existing services in addition to projects exceeding the capital expenditure threshold.
These applications must be filed on the first business day of any month (if filed any other day, they do not count as filed until the first day of the following month) and take up to 120 days to review.
Our Certificate of Need Services
Certificate of Need Application Services
- Drafting and filing applications
- Fielding questions during application review process
- Filing amendments
- Filing Project Implementation Progress Reports
- Filing waiver requests
Certificate of Need Survey/Compliance
The Michigan Department of Health and Human Services collects data on all CON covered services and facilities each spring through the CON Annual Survey. McCall Hamilton supports our clients in preparation for the survey process by answering questions and providing instruction during the process, or even completing the survey on their behalf.
MDHHS routinely conducts statewide compliance audits based, in part, on the annual surveys. McCall Hamilton assists our clients during CON compliance audits by advising on strategy, preparing for and participating in discussions with MDHHS as well as providing a resource of historical precedence and other comparable current compliance actions to help inform and support negotiations with the State.
Certificate of Need Policy/Commission Services
McCall Hamilton has a powerful lobbying practice with a strong presence with the Certificate of Need Commission and MDHHS. Our team is well respected by both and known for providing reliable quality information on very complex and sometimes controversial issues.
The Certificate of Need standards are reviewed every three years on a rotating basis, resulting in a constant cycle of updates and revisions. Our team participates in every policy workgroup and advisory committee, tracking all potential and upcoming changes and ensuring our clients’ interests are represented, whether they are actively participating themselves or not. For those clients interested in their own seat at the table, we provide support and guidance for participants. Our work results in great success on behalf of our clients when looking for changes, clarifications, and interpretations of CON policies.