When do I need to file a CON or a Notice for a construction project?

A very common question we receive from our nursing home clients. While The New York State Department of Health (NYSDOH) has attempted to simplify the rules, they remain complex and sometimes counter-intuitive.  As a result, many facilities have failed to file the required CON/CN and end up with state surveyors demanding to see the filed application long after the project is completed. Recent changes to the requirements have only caused greater confusion.

Certificate of Need
A Certificate of Need is generally required for construction projects that exceed $6 million in cost, changes to bed complement, changes in ownership and construction of replacement facilities. Renovation of clinical space of $6M or more requires a CON.

Construction Notice
The Construction Notice came into existence as a way to notify the NYSDOH of small projects and not delay the projects unnecessarily through a lengthy approval process. A CN requires no DOH approval. This was a good thing until it became clear that there was no minimum project cost to trigger this requirement. As a result, many small projects and equipment purchases, which had never required an application due to their low cost, were now suddenly required to file a CN. Few understood the requirements and providers neglected to file applications.

As the rules stand now, a Construction Notice is required for minor repairs and maintenance; non-clinical construction projects and replacement of some hospital equipment regardless of cost.  Painting and replacement of floor coverings even in clinical space are considered repair and maintenance and therefore can complete a Notice.

The September 2017 regulation change made the following revisions:

  • Health Information Technology (HIT) projects no longer require a CON but do require a Notice regardless of cost.
  • Non-clinical infrastructure projects such as HVAC, electrical, call bell systems etc. with cost less than $6M no longer need a filing of any kind.

Failure to file or filing incorrectly can result in survey deficiencies and reimbursement issues. It is always better to make sure before a project begins that you have completed the necessary filings.

If you have further questions or need assistance in filing a CON or a CN please contact Kathleen Angelone at kangelone@bonadio.com or (585) 662-4924.

This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.

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