/>iOn June 30, 2025 Connecticut Governor Ned Lamont signed a bill implementing the state budget through June 30, 2027, Public Act No. 25-168 (PA-168). PA-168, among other things, contains changes to the state’s Certificate of Need (CON) program.
Termination of Services – Effective from Passage
In Connecticut, hospitals generally must obtain CON approval from the Office of Health Strategy (OHS) for a termination of inpatient or outpatient services. In 2022, the legislature newly defined the term “termination of services” as when services cease for “a period greater than” 180 consecutive days (see our analysis of that legislation here). OHS subsequently sought, on at least one occasion in 2024, to take the position that there had been a termination of services necessitating CON approval where a particular service at a hospital had been closed for more than 180 days cumulatively over the period of a calendar year. The hospital pushed back on OHS’s interpretation of the statute, countering that the definition of that term required the hospital service to be terminated for 180 days consecutively in order to be met (and thus require CON approval).
PA-168 changes the definition of “termination of services” such that the term now encompasses the “cessation of services for a combined total of greater than 180 days within any consecutive two-year period.” This change was specifically sought by OHS in its annual legislative proposal, likely in response to its unsuccessful enforcement position taken in 2024, and now puts the onus on hospitals to closely track any service suspensions, interruptions or closures (regardless of the reason) to ensure compliance with CON program requirements.
Consideration of Cost and Market Impact Review Documents – Effective October 1, 2025
PA-168 also expressly allows the Health Systems Planning Unit (HSPU) of OHS to take into consideration cost and market impact review (CMIR) reports and comments when deciding CON applications for the transfer of ownership of a hospital. Existing law requires OHS to conduct a CMIR for certain CON applications involving the transfer of ownership of a hospital, where the purchaser is a for profit entity, or the purchaser is a hospital or hospital system that had revenue in excess of $1.5 billion in fiscal year 2013. The CMIR is performed by an independent third-party consultant, with the costs for such work borne by the purchaser of a hospital and subject to a cap of $200,000 per application.
Specifically, PA-168 allows the HSPU to consider the following as part of its CON application review:
- the preliminary CMIR report and the response of the applicant(s) to the preliminary report;
- the final CMIR report; and
- any written comments from the parties regarding the reports issued or submitted as part of the review.
Additionally, the law provides that OHS cannot place the preliminary CMIR report into the public record until the transacting parties to the CON have had a chance to respond to such preliminary report. PA-168 does not otherwise change the existing CMIR process.
Takeaways
These changes are the product of a legislative session that robustly debated changes to the CON program. The legislation demonstrates the substantial continued interest in Connecticut in the operations of the state’s CON program, despite the fact that for a second consecutive year the legislature declined to adopt more substantial proposed changes to CON processes. Of note, earlier in the session, Governor Lamont also signed an act establishing an emergency CON process for hospitals in bankruptcy (which we previously analyzed here, a process that has not yet been utilized in the state but is expected to expedite the transfer of ownership of the Prospect Medical hospitals in the state).
