On May 7, 2022, Connecticut Governor Ned Lamont signed into law the state’s fiscal year 2023 budget (HB5506) (Act) which implements the state budget and makes various amendments to certain laws of Connecticut. Among the changes, the law gives various new powers to the Office of Health Strategy (OHS) and makes changes to the Certificate of Need (CON) process in the state.
Notably, for the purposes of the CON requirements, the Act defines the term “termination of services” to mean “the cessation of any service for a period greater than one hundred and eighty days”. It appears that this additional definition was intended to add certainty to scenarios that require a CON. For example, under subsections (a)(5) and (a)(7) of the existing CON statute, a CON is required for “termination of inpatient or outpatient services provided by a hospital” and “termination surgical services by an outpatient”. surgical facility. Similar wording exists in paragraph (a)(15). Current law provides that a CON is not required for “the termination of services for which the Department of Public Health has asked the facility to surrender its license.” Given the different terms used in current legislation (“termination of inpatient or outpatient services” versus “termination of services”), it is unclear how the newly defined term will be applied to the CON statutes.
The act also establishes a 16-member task force to investigate listed CON-related initiatives that include, but are not limited to:
- the introduction of a price increase ceiling linked to the cost growth benchmark for business combinations;
- analyze services and facilities and their impact on equity and underserved populations;
- authorize OHS to require investments to meet community needs;
- ensuring local community representation on hospital boards;
- establish standards for measuring quality due to consolidation;
- the power of the Connecticut Attorney General to stop activities upon request or complaint by CON;
The task force is to make recommendations on the initiatives by January 15, 2023.
Additionally, the law implements a new tiered CON application fee that ranges from $1,000 to $10,000 depending on the cost of the proposed project. Under previous law, all CONs required a $500 fee. Now, fees will range from $1,000 for projects up to $50,000 to $10,000 for projects over $10 million.