Certificate of Need Laws in North Carolina — What Patients Need to Know
North Carolina has maintained a Certificate of Need (CON) law since 1978, requiring healthcare providers to obtain state approval before building new facilities, expanding services, or acquiring major medical equipment. The state’s CON program has historically been among the most comprehensive in the nation, but a significant legislative shift began in 2023 when lawmakers initiated a phased repeal that eliminated CON requirements for several service lines, including psychiatric beds. Understanding how these laws work — and how they are changing — is important for North Carolina patients navigating their healthcare options.
NORTH CAROLINA — KEY FACTS
| CON Law Status | ACTIVE CON LAW |
| Programme Scope | partial repeal |
| Year Enacted | See agency |
| Services Requiring Approval | hospitals, nursing homes, ambulatory surgery centres, imaging equipment (MRI/CT), dialysis facilities, hospice providers, psychiatric facilities, home health agencies |
| Governing Agency | North Carolina Department of Health and Human Services — Division of Health Service Regulation |
| Hospitals in State (CMS data) | Data not available |
The Arguments
WHAT SUPPORTERS ARGUE
Defenders of North Carolina’s CON laws argue that the approval process helps ensure healthcare resources are distributed equitably across the state, preventing an oversaturation of services in profitable urban markets while rural and underserved communities are left behind. They contend that CON review helps maintain the financial viability of existing safety-net hospitals that serve uninsured and Medicaid populations by preventing excessive competition that could siphon away paying patients. Proponents also argue that centralized planning can help control healthcare costs by avoiding unnecessary duplication of expensive services and equipment.
WHAT CRITICS ARGUE
Critics of North Carolina’s CON laws argue that the regulatory approval process creates barriers to entry that limit competition, ultimately driving up costs and reducing choices for patients. They contend that incumbent healthcare providers use the CON process to block potential competitors from entering the market, resulting in longer wait times and fewer options, particularly for services like ambulatory surgery and diagnostic imaging. Critics point to the 2023 phased repeal as an acknowledgment that the regulatory framework has become outdated and overly restrictive, especially for mental health services where demand far outstrips supply.
The Data
WHAT THE DATA SHOWS IN NORTH CAROLINA
The state’s decision to begin a phased CON repeal in 2023 — specifically targeting psychiatric beds among other service lines — reflects legislative recognition that certain healthcare sectors may benefit from reduced regulatory barriers to expanding capacity.
Recent Developments
In 2023, North Carolina enacted legislation initiating a phased repeal of its CON law, eliminating the approval requirement for several service lines including psychiatric beds. This marked a significant shift for a state that had historically maintained one of the broadest CON programs in the country, covering everything from hospitals and nursing homes to imaging equipment and home health agencies. The remaining CON requirements continue to be administered by the Division of Health Service Regulation within the North Carolina Department of Health and Human Services, and further legislative action may continue to reshape the program’s scope.
What This Means For Patients in North Carolina
For North Carolina patients, the ongoing CON changes mean that some types of healthcare facilities — particularly psychiatric services — may become more accessible as providers can now enter the market without state approval for those service lines. However, for the many services still covered by CON requirements, patients may continue to face limited choices in certain regions, as new providers must navigate a lengthy approval process before they can offer care.
THE BOTTOM LINE
North Carolina is in a period of transition, moving from one of the nation’s most comprehensive Certificate of Need programs toward a more selective regulatory framework, with the ultimate impact on healthcare costs, access, and quality still unfolding.
Frequently Asked Questions
Does North Carolina have a Certificate of Need law?
Yes, North Carolina has had a Certificate of Need law since 1978 with historically full scope. However, in 2023 the state began a phased repeal that eliminated CON requirements for several service lines, including psychiatric beds, while maintaining requirements for many other healthcare services.
What services require CON approval in North Carolina?
North Carolina’s CON law covers hospitals, nursing homes, ambulatory surgery centers, imaging equipment such as MRI and CT scanners, dialysis facilities, hospice providers, psychiatric facilities, and home health agencies. The 2023 phased repeal removed requirements for some of these categories, including psychiatric beds, though many services remain subject to CON review.
How do North Carolina CON laws affect hospital costs?
The effect of CON laws on hospital costs in North Carolina is debated. Proponents argue that CON requirements help control costs by preventing unnecessary duplication of services, while critics contend that limiting competition allows existing providers to charge higher prices without competitive pressure to reduce them.
Can I find out if a facility has CON approval in North Carolina?
Yes, information about CON approvals and applications in North Carolina is available through the Division of Health Service Regulation within the North Carolina Department of Health and Human Services. Patients and the public can access CON-related records and information through the agency’s website at https://www.ncdhhs.gov/divisions/health-service-regulation/certificate-of-need-section.