Amendments to Iowa's Certificate of Need Rules

Posted by Adam Freed on Wednesday, December 17, 2014

On December 10, 2014, the Iowa Department of Public Health (the "Department") adopted amendments to Iowa's Certificate of Need ("CON") rules.  The State Health Facilities Council (the "Council") approved the amendments on November 3, 2014, and the State Board of Health adopted the amendments on November 12, 2014.  The amendments will become effective on January 14, 2015.  The following summarizes several of key parts of the amendments. 

The amendments eliminate the previous categorization of “usable beds” between the “acute” and “long-term care” categories.  Instead, bed capacity for hospitals will be defined as the total licensed beds that a hospital reports on the state survey section of the American Hospital Association Annual Survey of Hospitals.  Bed capacity for any other type of health care facility will be the facility’s licensed bed capacity.

The amendments formalize the process for obtaining CON non-reviewability determinations.  Specifically, a sponsor of a proposed project will be allowed to submit a written request to the Department for a determination of whether the proposed project requires a CON.  The sponsor will be required to cite specific legal authority to support its position that a proposed project is not reviewable.  If the Department determines that a CON is required, then the written request will be deemed to be a letter of intent, and the sponsor will be required to submit a CON application.  It is important to note that no Council action would be required for a denial of non-reviewability.  If the Department determines that a CON is not required, however, then the Council will consider the determination of non-reviewability at its next meeting. 

The amendments clarify what actions constitute “final decisions” under the Iowa Administrative Procedure Act, and are therefore subject to judicial review as final agency action.  A decision by the Council that a project does not require a CON (in other words, a non-reviewability determination) would constitute final agency action.  In addition, a decision by the Council to revoke a CON would constitute final agency action.

Under the current rules, if a project sponsor requires an extension of its CON, it must file an extension request no later than 45 days prior to expiration of a CON.  The amendments will give project sponsors additional time to file extension requests by shortening this period to 30 days.

It is important to note that the amendments do not make any changes to the standards for CON review (the standards that the Council considers to determine whether there is a need for a specific project).  We expect the Department to propose amendments to the standards in the future.  The amendments are available in the December 10, 2014 edition of the Iowa Administrative Bulletin (page 1139), which is available at: https://www.legis.iowa.gov/docs/aco/bulletin/12-10-2014.pdf

We will continue to monitor developments related to the CON rules.  If you have any questions, please do not hesitate to contact the BrownWinick Health Law Practice Group