The 2014 Florida Legislature passed a bill, that if it becomes law, will immediately lift the moratorium on issuing certificates of need for new or expanded nursing home beds. If this happens, Florida should see the construction of new nursing homes and the expansion of existing nursing homes for the first time since 2001 creating opportunities for nursing home developers, lenders, owners and operators.

Florida law requires that before new, converted or expanded nursing home beds can be constructed, the Agency for Health Care Administration (AHCA) must issue a certificate of need (CON) evidencing a community need for the additional beds.  The granting of a CON is based on a determination of need by  AHCA using a formula that projects the need for nursing home beds within a three-year time horizon in each of the 44 sub-districts within AHCA’s 11 service districts.

Since 2001 the Legislature has imposed a statewide moratorium on issuing CONs for nursing home beds that has prevented AHCA from approving additional nursing home beds whether, new, converted, or expanded.  This moratorium has been extended several times by the Legislature, and the current moratorium is scheduled to expire on October 1, 2016, or upon the date that Florida’s new Medicaid managed care program is implemented statewide, whichever is earlier.  Full implementation of the Medicaid managed care program is required by law to be completed by October 1, 2014, and the current CON moratorium will expire on that date.  There are several exceptions to the nursing home CON moratorium, the most significant of which is adding nursing home beds in a continuing care retirement community (CCRC).

The 2014 Legislature passed House Bill 287 unanimously in both houses.  If enacted into law by Governor Rick Scott, this bill will repeal the moratorium on CONs for nursing home beds effective July 1, 2014.  As a result, on that date AHCA will be authorized to approve new, converted, or expanded nursing home beds under the CON process.  However, the bill prohibits AHCA from issuing any CONs for new nursing home beds once 3,700 total new beds have been approved from July 1, 2014 to June 30, 2017.  On July 1, 2017, this prohibition will expire.

House Bill 287 also amends the existing CON law to provide for increased flexibility in the CON approval process for the construction of new nursing homes and the expansion of existing nursing homes, including:

• Decreasing the required sub-district occupancy rate that AHCA uses in its nursing home bed need assessment from 94 to 92 %.
• Providing for expedited review of a CON application for the replacement of nursing homes within a 30 mile radius of an existing nursing home.
• Creating an exemption from the CON requirement for a nursing home that is adding up to 30 beds or 25% of the number of beds in the nursing home that are being replaced, whichever is less.