Certificate of Need Laws in Michigan — What Patients Need to Know
Michigan is one of the states that maintains a full-scope Certificate of Need (CON) program, requiring healthcare providers to obtain state approval before building new facilities, expanding existing ones, or offering certain regulated services. First enacted in 1972, Michigan’s CON law has been a subject of ongoing debate among lawmakers, healthcare providers, and patient advocates. This explainer breaks down how the law works, what both supporters and critics say, and what it means for patients seeking care in Michigan.
MICHIGAN — KEY FACTS
| CON Law Status | ACTIVE CON LAW |
| Programme Scope | reform pending |
| Year Enacted | See agency |
| Services Requiring Approval | hospitals, nursing homes, ambulatory surgery centres, imaging equipment (MRI/CT), dialysis facilities, hospice providers, psychiatric facilities |
| Governing Agency | Michigan Department of Licensing and Regulatory Affairs — CON Commission |
| Hospitals in State (CMS data) | Data not available |
The Arguments
WHAT SUPPORTERS ARGUE
Defenders of Michigan’s CON laws argue that the approval process helps prevent the oversaturation of healthcare services in already well-served areas, ensuring that resources are distributed more equitably across the state, including in rural and underserved communities. Supporters also contend that CON requirements help maintain quality standards by ensuring that facilities performing complex procedures handle a sufficient volume of cases to maintain clinical expertise. They further argue that without CON oversight, new entrants might selectively offer only the most profitable services, leaving existing hospitals financially weakened and less able to serve all patients.
WHAT CRITICS ARGUE
Critics of Michigan’s CON laws argue that the approval process creates barriers to entry that reduce competition, potentially leading to higher prices and longer wait times for patients. Opponents contend that incumbent healthcare providers can use the CON review process to block competitors, effectively shielding themselves from market forces that might otherwise drive innovation and cost reduction. Some critics also point out that the lengthy and expensive application process disproportionately burdens smaller and independent providers, consolidating market power among larger health systems.
The Data
WHAT THE DATA SHOWS IN MICHIGAN
No CMS hospital data was available in the current sample for Michigan facilities, making it difficult to draw direct statistical comparisons between Michigan and states without CON laws at this time. Michigan’s CON program covers a wide array of services — including hospitals, nursing homes, ambulatory surgery centers, imaging equipment such as MRI and CT scanners, dialysis facilities, hospice providers, and psychiatric facilities — indicating one of the broader regulatory scopes among states that maintain CON programs.
Recent Developments
In 2023, Michigan’s legislature debated the potential repeal of the state’s CON laws, reflecting a national trend of states reconsidering these regulations. However, no repeal bill ultimately passed, and the CON program remains fully in effect. The law was last amended in 2023, though the CON Commission under LARA continues to administer the program and review applications for new and expanded healthcare services.
What This Means For Patients in Michigan
For patients in Michigan, the CON law means that the availability of certain healthcare services — from new hospitals and surgery centers to MRI machines and dialysis clinics — is subject to a state approval process that weighs community need and existing supply. Whether this results in better-coordinated, higher-quality care or in reduced choice and higher costs remains a matter of active debate among policymakers and healthcare experts.
THE BOTTOM LINE
Michigan maintains one of the nation’s more comprehensive Certificate of Need programs, and while the 2023 repeal debate reflected growing scrutiny, the law remains in full effect, leaving both its potential benefits for care coordination and its potential drawbacks for competition and patient choice as open questions for the state’s healthcare future.
Frequently Asked Questions
Does Michigan have a Certificate of Need law?
Yes, Michigan has had a Certificate of Need law since 1972, and it remains fully in effect today. The law requires state approval before healthcare providers can build new facilities, add certain services, or acquire major medical equipment.
What services require CON approval in Michigan?
Michigan’s CON law covers a broad range of healthcare services, including hospitals, nursing homes, ambulatory surgery centers, imaging equipment (such as MRI and CT scanners), dialysis facilities, hospice providers, and psychiatric facilities. This makes Michigan’s program one of the more comprehensive CON regimes among states that still have such laws.
How do Michigan CON laws affect hospital costs?
The effect of CON laws on hospital costs is debated. Supporters argue the laws prevent wasteful duplication of services that could drive up systemwide costs, while critics contend that limiting competition can reduce the market pressure that might otherwise help keep prices lower for patients.
Can I find out if a facility has CON approval in Michigan?
Yes, information about CON approvals and applications in Michigan is available through the Michigan Department of Licensing and Regulatory Affairs (LARA) CON Commission. Patients and the public can visit the agency’s website at https://www.michigan.gov/lara/bureau-list/bhs/con for details on approved projects and pending applications.