NCDHHS regulators reject requests for three new hospitals, beds, and OR’s under CON law

State regulators have approved an additional 70 hospital beds and four operating rooms for hospitals in Wake County, a far cry from the 246 hospital beds and 13 additional operating rooms that were requested. Some of those beds and rooms were part of larger requests for three new hospitals, which were also rejected.

The applications of the extra healthcare capacity were submitted in September.

Twenty-four beds were approved at WakeMed Cary Hospital, 21 at WakeMed Raleigh Campus, 20 at UNC Rex Hospital in Raleigh, and five at Duke Raleigh Hospital.

Additionally, two new operating rooms were approved at WakeMed and UNC Rex, both in Raleigh.

A further two operating rooms and two procedure rooms were also requested at WakeMed Raleigh, along with twenty-five beds at WakeMed North, but those requests were denied.

UNC Rex was denied an application for a new 50-acute care bed hospital that included two operating rooms in Wake Forest. The proposed project was expected to cost $462.1 million and be completed in July 2030.

Duke Raleigh had sought an additional 36 beds, which were denied, along with three new operating rooms. Duke Health was also denied an additional 17 beds for the hospital it is building in Cary and an application for a new 12 acute care bed hospital that would include one operating room in Garner. The proposed project was expected to cost $205.1 million and be completed in July 2028.

In addition, Winston-Salem-based Novant Health’s proposal for a new 36-acute care bed hospital that would include one operating room in Knightdale was also denied. The project was expected to cost $286.9 million and be completed in October 2029.

The North Carolina Department of Health and Human Services Division of Health Service Regulation made the determination based on the Certificate of Need law (CON), which prohibits healthcare providers from acquiring certain medical equipment or developing new health services, facilities, and health service facility beds without the prior approval of NCDHHS. According to the agency, the law restricts unnecessary increases in healthcare costs and limits unnecessary health services and facilities based on geographic, demographic, and economic considerations.

The debate over the usefulness of the CON law in North Carolina and elsewhere has gone on for years.  

In 1986, the federal government repealed the CON mandate, and many states immediately began retiring their CON programs.

According to the Pacific Legal Foundation, residents in states with Certificate of Need laws receive lower-quality care, have access to fewer facilities, pay more for care, and wait longer for care. Research overwhelmingly shows that certificate of need laws lead to bad patient outcomes.  

In October, Forbes Advisor ranked the Tar Heel State as the 10th worst state for healthcare access. The publication also ranked it the worst for healthcare costs last year. With the state’s burgeoning population, critics point out CON’s negative effects considering more access to healthcare is greatly needed.

“This latest ruling demonstrates the absurdity of Certificate of Need (CON) laws,” said Brian Balfour, senior vice president of Research for the John Locke Foundation. “It’s incredible to think that at a time when so many North Carolinians struggle with access to medical care that the state insists on placing limits on medical providers who are willing to expand their services. Providers should not have to ask permission from a state commission – which at times may include a competing provider – to invest in equipment and facilities that will expand access to patients. North Carolina legislators need to seriously consider rolling back this outdated and intrusive restriction on the state’s healthcare providers.”

Hospital systems can reapply for their projects as another round of applications is expected for an additional 267 acute care beds in 2027.

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