FRANKFORT — The debate over certificate of need regulation in Kentucky is back for the 2026 legislative session.
House Bill 407 from Rep. Marianne Proctor (R-Union) would entitle applicants for certificates of need to a hearing before the Cabinet for Health and Family Services. Now only providers who already have a certificate to provide the service in question may request a hearing, but they no longer would have that right under the proposal.
The bill passed the House health services committee last week despite opposition from St. Elizabeth Healthcare, a prominent medical provider in Northern Kentucky
Proctor’s proposal is a way to combat what some have condemned as a “competitor’s veto” in the certificate of need (often called by its abbreviation, CON) process.
Speaking in favor of the bill, Kileen Lindgren, the senior state policy manager for the conservative Pacific Legal Foundation, faulted the current law, saying it “confers a right” to non-applicants. “What that does is really tilt the scales towards them … against an applicant.”
The CON application process attempts to certify that there is a need for a medical service, be that extra beds in a hospital, an extra MRI machine, or a new facility altogether, like a freestanding birthing center.
CON laws are meant to control health care costs by limiting duplicate services, according to the National Conference of State Legislatures (NCSL). Without CON, hypothetically, a community could have many duplicates of the same service. That could force a facility — such as a hospital — to raise prices to compensate for underutilized services brought on by that competition.
“What this bill seeks to do is streamline the process of CON,” Proctor said. “That’s all it does. It does not repeal certificate of need. It streamlines the process.”
St. Elizabeth: ‘There is no such thing as a competitor’s veto’
Northern Kentucky lawyer Mark Guilfoyle, who represents St. Elizabeth Healthcare, told the Thursday committee that Proctor’s bill “really puts the applicant in the driver’s seat to be the only one to really control the process.”
“We think that’s going to lead to you’re going to get a CON every time you file for one,” Guilfoyle said. “And we don’t think that’s right.”
He also argued that CON law does not present a barrier to diversity of care: “St. Elizabeth is not a monopoly,” he said.
He also asserted: “There is no such thing as a competitor’s veto. You might have heard that term bandied about.”
Currently, only an “affected person” — the person who already holds a CON for the services being applied for — can request a hearing. Proctor’s bill would transfer that right to the applicant.
“The way things work currently under certificate of need law is that when somebody files an application, it goes on public notice, and an affected person can look at it and see it, and if they’re opposed, request a public hearing,” Guilfoyle said. “That’s how you oppose an application. That right to request a hearing is now being given only to the applicant for CON. And our concern is, why would an applicant ever request a hearing to oppose its own application? That seems to be a little inconsistent.”
Guilfoyle said the bill “will do damage” to the CON process and “harm safety net hospitals” that are required to treat uninsured, low income people and those on Medicaid.
“There’s no question that certificate of need survives this bill if it passes,” he said. “But what we’re concerned about is that CON will really become kind of a shell of its former self if it passes.”
‘Equip both’
But Lindgren with the Pacific Legal Foundation said the bill would still allow providers to make their concerns known. It requires the cabinet to “establish a procedure for requesting information from a holder of a certificate of need for the purpose of making a determination regarding an application for a new certificate of need or an expansion of an existing certificate of need.”
She also said that removing or limiting CON has not resulted in higher consumer costs in other states. As of January 2024, 12 states either allowed their CON programs to expire or fully repealed them, according to the National Conference of State Legislatures.
“This isn’t, certainly, an effort to close hospitals,” Lindgren said. “I actually think, when you’re looking at certificate of need and across the board of different reforms, what we’re really trying to do is equip both existing providers and new providers to be able to offer the services that are needed and wanted at the time.”
Chad Reese, senior policy advisor with the nonprofit libertarian Institute for Justice, said CON is “one of the most studied issues in economic policy that has one of the clearest outcomes.”
“The evidence is overwhelming,” Reese said. “Reducing or streamlining certificate of need laws overwhelmingly reduces cost for the consumer and increases access as well.”
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Written by Sarah Ladd. Cross-posted from the Kentucky Lantern.
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