Mid-Atlantic Health Law TOPICS

In October 2023, the Maryland Health Care Commission (MHCC or Commission) reviewed and approved for public comment Proposed Final Regulations making significant changes to the Procedural Regulations for Health Care Facilities and Services. This is the latest step in a multi-year process of updating the certificate of need (CON) regulations to conform with significant statutory changes that have occurred since the regulations were last updated. 

The following is a summary of the proposed changes that have gone through multiple rounds of informal public comment.  The final public comment period closes in January 2024.

Post-Approval Requirements for Non-CON Projects 

The proposed regulations would require projects that are not required to undergo a full CON review process to comply with many of the post-approval requirements for projects undergoing a full CON review. The Commission insists that this is not a change from its current interpretation of the regulations, and that the proposed new language only serves to clarify an existing requirement. Commentors disagree, arguing that this is a significant change that requires more detailed discussion before adopting the proposed language.

The proposed regulations explicitly require projects that are exempt from CON review, such as conversions of hospitals into freestanding medical facilities and consolidations of health care facilities, to develop a project implementation schedule, provide the Commission with progress reports, make capital expenditure obligations by certain deadlines, and seek approval of certain project changes through the project change request process 
established for CON projects. 

Since it is the Commission’s position that this is already required, projects operating under an exemption should be aware that the Commission believes those projects are currently subject to these extra reporting requirements.

Additionally, the proposed regulations allow the Commission to place restrictions on an approved exemption request.

Timeline Flexibility 

Currently, the regulations establish strict implementation timelines for approved projects that do not provide for the flexibility needed for projects of differing scale. The proposed regulations would require each applicant to propose a reasonable schedule to implement the project in its application. 

Additionally, the proposed regulations would allow the Commission to develop guidance for calculating allowable inflation, which is intended to reduce the number of project change requests submitted to the Commission as a result of escalating construction costs. 

Other Changes

The proposed regulations make additional changes, such as imposing timeliness requirements for the MHCC staff to conduct its completeness review of a CON application, and limiting the rounds of follow up questions that may be asked during the completeness review.

The proposed regulations also limit who qualifies as an interested party, and is thereby able to intervene in an applicant’s CON review process and to object to the application. The current regulations do not require that an interested party demonstrate a negative impact to its health care facility. The proposed regulations would require a person who wants to be an interested party to demonstrate that the quality of care at its health care facility would be materially affected, or that the project would result in a substantial depletion of essential personnel or other resources. 

Additionally, under the proposed regulations, the Commission will now consider a project’s impact on health equity, and the character and competence of applicants when reviewing proposals.

Darci M. Smith
410-576-4153 • dsmith@gfrlaw.com