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Health Care Facility Services   CON    Determination of Coverage

Ambulatory Surgical Capacity in a Freestanding Setting

Determination of Coverage for Ambulatory Surgical Capacity in a Freestanding Setting (August 2023)

Hospital Capital Expenditures above the Current Capital Expenditure Review Threshold

In general, a certificate of need is required if a health care facility makes a capital expenditure, as defined in Health-General Article, §19-120(k), Annotated Code of Maryland, that exceeds a threshold established in law. However, hospitals may obligate an amount of money exceeding the review threshold for capital expenditures for physical plant construction or renovation, or before it receives a donated physical plant whose appraised value exceeds the review threshold, if the capital expenditure does not require, over the entire period or schedule of debt service associated with the project or plant, a total cumulative increase in patient charges or hospital rates of more than $1,500,000 for the capital costs associated with the project.

A hospital must receive a written determination of non-coverage for any capital expenditures it proposes to obligate without Certificate of Need approval under this provision. At least 45 days before an obligation is made or the physical plant is donated, the hospital must provide notice of the obligation or donation to the Maryland Health Care Commission and the Health Services Cost Review Commission. This notice must contain:

  1. A description of the proposed capital project, including whether it involves new construction, renovation or additions to the existing physical plant, or the donation of a physical plant, with any necessary adaptations;
  2. The total capital costs associated with the project;
  3. The sources and uses of funds to be applied to the project, including hospital equity contributions, if applicable, as documented by audited financial statements of the hospital and relevant subsidiary corporations, if any, from which funds are to be taken;
  4. A description of the financing arrangement, if applicable, for the proposed project, including the debt service schedule; an
  5. A statement by one or more persons authorized to represent the hospital that the hospital does not require a total cumulative increase in patient charges or hospital rates of more than $1,500,000 for the capital costs associated with the project.

Notice of Acquisition / Transfer of Ownership Interest of a Comprehensive Care Facility 

"Waiver" Beds or "Bed Creep"

Health care facilities that are not acute general hospitals, may add a limited number of beds without Certificate of Need authorization.

In order to qualify for such additional beds, at least two (2) years must have passed since the initial licensure of the health care facility or two (2) years must have passed since any change in the facilities licensed bed capacity.

For comprehensive care facilities, the allowable increase is limited to ten (10) beds or ten (10) percent of the facility’s licensed bed capacity, whichever is less. For special rehabilitation hospitals, special care units, as defined in COMAR 10.07.14-1 and 14-2, intermediate care facilities, and residential treatment centers, as defined in Health-General Article, §19-301(p), Annotated Code of Maryland, the allowable increase is limited to ten (10) beds or forty (40) percent of the facility’s licensed bed capacity, whichever is less.

Rules governing the use of these waiver bed provisions by comprehensive care facilities (or nursing homes) have been established in the State Health Plan, COMAR 10.24.08, and should be consulted prior to notifying the Maryland Health Care Commission seeking confirmation that a nursing home may add bed capacity under these provisions of the CON law.


Last Updated: 10/4/2023