Oregon Certificate of Need (CON) Program

Oregon Certificate of Need (CON) Introduction

Like many other states, Oregon has an extensive CN process in place for healthcare services and facilities. Winning approval for a CN application is often a time consuming and difficult undertaking. Working with RPC provides clients with a team of consultants with experience working with CON projects.

When working on a CON project, RPC can prepare the entire CN application or sections of the application as the client prefers. When the client is defining the project and deciding whether to file an application, RPC can help assess the market and regulatory situation to determine the relative likelihood of success for a project. RPC not only works to create a thorough market, need and financial analysis, but also works seamlessly with the client’s staff, architects, engineers and, other outside consultants to create a solid CN application.

RPC is led by Ron Luke, JD, PhD, who has prepared CN applications and presented testimony in CN hearings since 1981 in more than 20 states.  RPC’s work on CN projects includes the opening of new acute care hospitals, hospices, physical rehabilitation and psychiatric specialty hospitals, and nursing homes, the relocation and addition of beds, and the acquisition of major medical equipment. Working with RPC during the CN process gives the applicant the advantage of a skilled, experienced team that can provide expert advice and produce an effective CN application.

State Agencies

The Health Care Regulation and Quality Improvement (HCRQI) section of the Oregon Health Authority’s Public Health Division regulates health care facilities, providers, and suppliers in acute care and community-based programs.

Certificate of Need Program

Health Care Regulation and Quality Improvement Program
800 NE Oregon Street, Suite 465
Portland, OR 97232
(503)-979-9628

Administrator of the Public Health Division
The administrator or his designee chairs the public meeting and oversees the final decision.

Services that Require CON

The purpose of Oregon’s CN program is to evaluate whether a proposed health care facility or service is needed in the community.  ORS 442.315(1) requires “any new hospital or new skilled nursing or intermediate care service or facility not excluded pursuant to ORS 441.065 … [to] obtain a certificate of need from the Oregon Health Authority prior to an offering or development.” New hospitals and a wide variety of nursing facility projects require CN review.

Certificate of Need Process Milestones

For a full review, the applicant follows the process described below.

1. Letter of Intent (LOI)
   An LOI may be submitted at any time to the Public Health Division.  The division distributes copies of the LOI to institutions who offer similar services in the area and invites them to submit comments up to two days before the division makes its ruling on the LOI.  Within 15 days of LOI receipt, the division notifies the applicant whether the project is subject to CN review.  Notices of approved LOIs are published monthly in the Certificate of Need Update.  The LOI remains valid for one year following the division’s ruling.
2. File Application
   An applicant can request a “preapplication conference” to discuss items of concern with division staff prior to submitting the application.  An application for full review can be filed after the first day of the month following the publication of LOI notices. An applicant may amend the application within 45 days of submitting a complete application.
3. Initial Review
   The division screens applications for completeness and notifies the applicant within 15 days if additional information is required.  The division mails notification of completeness status and a review schedule to the applicant, local HMOs and health care facilities, newspapers, and affected parties.
4. Public Meeting
   Any affected party may request a public meeting up to 21 days before the division’s decision is due.  The public meeting allows discussion of issues relevant to the application, including submission of documents and evidence, oral testimony from any person, and questions from the division staff.
5. Decision
   The division renders a decision within 90 days of declaring an application complete.  The staff produces written findings as a basis for the decision.  The decision is mailed to the applicant and affected parties; it is finalized ten days after it is proposed.
6. Informal Hearing
   Within that ten-day period, any person may request that an informal hearing be held before the final decision.  The division sends a notice to affected parties within 15 days of receipt of the request.  This hearing’s purpose is to discuss the decision with the division, present new information, and provide new testimony.  The division renders a final decision 10 days after closing the informal hearing.
7. Reconsideration Hearing
   An applicant or affected person may petition for a contested case hearing within 60 days of the final decision.  The petitioner has the burden of proving entitlement to reconsideration.
8. Progress Reports
   The applicant files reports with the division at least every three months, until the project is complete.  Upon completion, the applicant submits final actual capital expenditures and total cost including interest.  The division responds within 30 days acknowledging that the project followed the scope of certificate or seeking injunction to enforce obedience to the CN. The project is considered to be complete on the day that the new service/area/facility/equipment begins to treat patients.

What criteria are used to review a CON?

Every full review is subject to the criteria below, as well as special criteria for certain types of proposals.

Need

• Past, present, and future need in the service area based on approved need methodologies
• (For a remodeling/replacement project) the effect of proposed activity on provision of services
• Improvement in patients’ access to services
• (For an HMO project) the need for proposed project by members/enrollees

Availability of Resources

• Most effective and least costly alternative
  • Best solution among internal, external, possible, alternatives
  • Best price for proposal was sought and selected
• Qualified personnel, adequate land, and adequate financing to develop and support the project
• Relationship to service area (no unnecessarily duplicative services or negative financial impact)
• Meets state licensing, fire code, and architectural standards

Economic Evaluation

• Financial status of applicant
  • 5-year forecast
  • Plan to cover expenses
  • Ratio analysis (debt capability, liquidity, and profitability)
  • Depreciation calculation
  • Cash, assets, and other sources of funding
  • Money market conditions
  • Estimation method for patient days, expenses, and revenues
  • Rate and Inflation assumptions
• Impact of the proposal on the cost of healthcare

Certificate of Need Application Filing Fee

The applicant pays a fee according to projected costs and is likely to incur legal fees and additional labor expenses during the CN application process.  The fee schedule depends on the project cost, and is available here.

Additional Sources

(links good as of January 2024)

Oregon Certificate of Need Program
https://www.oregon.gov/oha/ph/ProviderPartnerResources/HealthcareProvidersFacilities/CertificateNeed/Pages/index.aspx

CN Statute
https://www.oregonlegislature.gov/bills_laws/ors/ors442.html

CN Rules
https://www.oregon.gov/oha/PH/PROVIDERPARTNERRESOURCES/HEALTHCAREPROVIDERSFACILITIES/CERTIFICATENEED/Pages/adminrules.aspx

CN Application Forms
https://www.oregon.gov/oha/PH/PROVIDERPARTNERRESOURCES/HEALTHCAREPROVIDERSFACILITIES/CERTIFICATENEED/Pages/forms.aspx