Connecticut Health Law

Connecticut hospitals, ambulatory surgery centers, and compliance professionals assisting other health care facilities and physician groups should prepare now for sweeping changes to the state’s certificate of need (CON) process. Governor Lamont has signed into law the 2026 Budget Implementer Bill (PA 26-68, the Act). Sections 226 through 237 of the Act comprise the bulk of the changes and represent a major overhaul of Connecticut’s CON regulatory framework in the way CON applications are submitted, reviewed, and decided. The Act also transfers oversight from the Office of Health Strategy (OHS) (Section 152), which will be dissolved, to a new three-person CON Panel.

Key Effective Dates for Connecticut CON Compliance: The new CON provisions of the Act become law on October 1, 2026; however, the amendments will largely become operative on July 1, 2027. As a practical matter, this means the current CON law will remain largely unchanged until that time (see Sections 106 through 120 and 238 through 245 of the Act), with CON applications filed prior to that date remaining subject to these standards for the most part (with references to OHS  being replaced with the Department of Public Health (DPH) effective July 1, 2026).

The Act is designed to reduce the time and cost of obtaining a CON, though whether it achieves these goals remains to be seen. By redefining which transactions and activities require a CON, the law will reduce the overall number of events triggering the CON requirement. At the same time, the Act introduces greater transparency and accountability measures in response to concerns that emerged following the controversial acquisition of several Connecticut hospitals by Prospect Medical Holdings, Inc., particularly regarding private equity investment in health care facilities and management service organization (MSO) arrangements with physician groups.

Understanding how to ensure future compliance with the Act and determining whether the new law advantages or disadvantages an organization’s ability to either secure CON approval or avoid CON review entirely are key strategic planning considerations that impacted health care providers should be engaged in now.

Top 10 Changes to Connecticut’s Certificate of Need Law

1. New CON Panel Governance: A Three-Member Decision-Making Body (Section 227)

A new three-person CON Panel will make final decisions on CON applications submitted on and after July 1, 2027. The Panel will consist of:

• The Commissioner of Public Health (serving as chairperson);
• The Secretary of the Office of Policy and Management; and
• The Commissioner of Social Services (or their respective designees).

Beyond ruling on CON applications, the Panel will also make final decisions on civil penalties, cease and desist orders, DPH policy approvals implementing the CON law, hospital plans for continued care access during service terminations, and sales of nonprofit hospitals under CGS Section 19a-486a. The Panel will meet monthly, with special meetings as needed, and decisions will be made by majority vote.

2. New CON Program Within DPH (Sections 228 and 235)

A new CON Program is established within DPH to receive applications and support the review process. Applicants will file directly with the CON Program, which will prepare a report on each application. The CON Program will also issue CON Determinations in the same fashion as current law, and the CON Program’s director will investigate compliance inquiries concerning the new law.

3. Revised CON Requirements: What Does, and Does Not, Require Approval (Section 229)

The Act significantly revises which activities require CON approval. Key changes include:

• Expanded “Change of Ownership or Control” Definition: The new law requires a CON for a “change of ownership or control” of a health care facility—a broader standard than “transfer of ownership” under current law. The new term includes mergers; changes in governing body control; acquisitions of 25% or more of assets, equity, or voting shares; and real estate transactions involving 20% or more of a hospital’s total assets. Important for private equity: These changes mean private equity firms and similar investors looking to acquire hospitals or other licensed facilities or to partner with large physician groups will face heightened regulatory scrutiny.
• Large Group Practice Transfers: Consistent with current law, a change of ownership or control of a “large group practice” (generally eight or more physicians) to a qualifying physician or physician group will not require a CON. However, the acquiring party must provide notice of the transfer to the CON Program—a new transparency requirement.
• Service Terminations No Longer Requiring CON: After June 30, 2027, certain service terminations will no longer require a CON, including terminations of inpatient or outpatient hospital services, emergency department terminations by short-term acute care general hospitals, and terminations of surgical services by outpatient surgical facilities.
• Additional CON Exemptions: The following activities and entities will not require a CON:
  • Associations between group practices and MSOs where the MSO does not share in profits or net revenue but is paid fair market value for services;
  • Relocations of facilities within the same town or within 10 miles of the existing facility, provided no substantial change to payer mix or patient population occurs;
  • Nonprofit or state-operated facilities that solely provide behavioral health or substance use disorder treatment services; and
  • Programs licensed or funded exclusively by the Department of Children and Families (other than psychiatric residential treatment facilities).
• End of State Contractor Exemption: Under current law, nonprofit providers with State contracts are generally exempt from CON requirements. Beginning July 1, 2027, these providers will need to obtain a CON for any activities requiring approval under the new law.

4.  Streamlined Filing Procedures and Deadlines (Section 231)

The Act establishes new CON application procedures:

• Application Deadline: CON applications must be submitted by the 15th of each month. However, the practical impact of this monthly deadline on speeding the CON process as a whole is debatable given that the CON Program can subject an application to a completeness review before it is deemed eligible for submission to the CON Panel.
• Advance Notice Requirement: Applicants must submit a brief description of their proposal to the CON Program at least 21 days before the application deadline. A new notice is required if the application is not filed within 90 days. This notice will be posted on the CON Program’s website, and, notably, the Act eliminates the current requirement for newspaper and community site publication.
• Completeness Review: The CON Program must notify the applicant whether the application is complete within 15 days after the deadline. While the Program may request additional information, these requests cannot delay review timelines unless both parties agree. The CON Program may also supplement the record with relevant data, analyses, or reports within 75 days after an application is deemed complete. Applicants have 10 days to respond to any supplemental evidence, and these responses become part of the public record. 

5.  Updated Decision Criteria for CON Approval (Section 230)

• Factors: The factors the CON Panel must consider when deciding whether to issue a CON have been revised. Current law lists 12 factors for the Health Systems Planning Unit (HSPU) of OHS to consider. The new law consolidates this list while adding new considerations, including whether there is evidence of prior financial mismanagement or misconduct by the applicant. The law also removes certain additional factors currently required for hospital ownership transfers.
• Consultant Fees: The CON Program, like the HSPU under current law, may retain a consultant paid by the applicant. However, the Program must first notify the applicant of its intent to engage a consultant, at which point the applicant may withdraw the application. Consultant fees will be capped at $100,000.

6. Enhanced Transparency: New CON Program Report Requirement (Section 231)

The CON Program must submit a report summarizing each application to the public record. This new requirement is designed to improve transparency and accountability by explicitly requiring analysis of each statutory criterion. Reports must be added to the record at least 10 days before any public hearing—and no later than 90 days after an application is deemed complete.

7. Mandatory Public Hearings and Intervenor Procedures (Section 231)

• Beginning July 1, 2027, public hearings on CON applications will be required unless the applicant waives this right in accordance with the law. Notably, such waiver also constitutes a waiver of the applicant’s right to appeal to the Superior Court under CGS 4-183. The CON Panel must convene a hearing within 90 days after an application is deemed properly filed and complete. The hearing record must close within 10 days after the hearing adjourns, unless both parties agree to keep it open.
• The Act establishes clear procedures for third parties seeking intervenor status. A person requesting intervenor status must file notice of intent within 20 days after the CON applicant posts its notice. The petition for intervenor status must then be filed within 21 days after the applicant files the CON application.

8. Expedited Review Pathway for Certain Applications (Section 232)

By January 1, 2028, the CON Panel must establish an expedited review pathway for the following categories:

• Relocations more than 10 miles away and outside the current town;
• Increases in inpatient or outpatient hospital beds;
• Acquisition of CT, MRI, PET, and PET-CT scanners (where CON approval is required);
• Addition of two or three operating rooms within a three-year period by an outpatient surgical facility or short-term acute care general hospital; and
• Any other category designated by DPH.

Application fees for the expedited pathway remain the same as the standard CON process. 

9. Expanded Cost and Market Impact Review Requirements for Hospital Transactions (Section 234)

The Act broadens the circumstances requiring a cost and market impact review for hospital ownership transfers. Under current law, such reviews apply when the purchaser is for-profit or is a hospital or hospital system with net patient revenue exceeding $1.5 billion (based on FY 2013).

Under the amended law, a cost and market impact review will be required when: (a) a CON application has been filed for a hospital ownership transfer, or a notice of material change has been filed with the Attorney General under CGS §19a-486i involving a hospital; and (b) the purchaser is organized or operated for profit, or is a hospital or hospital system with net patient revenue exceeding $1 billion (based on FY 2025). 

10. New Service Line Pause Option for Hospitals (Section 237)

Beginning July 1, 2027, hospitals gain new flexibility to temporarily pause services without CON Program notification:

• 90-Day Pause Option: A hospital may temporarily pause a “service line” (a category of inpatient and outpatient services, excluding emergency department services) for up to 90 days without applying for a CON or notifying the CON Program.
• Extended Pauses and Terminations: If a hospital intends to indefinitely terminate a service line or pause it for more than 90 days, the hospital must notify the CON Program in writing at least 90 days in advance, with copies to the Attorney General, Department of Social Services, Office of the Healthcare Advocate, and—for behavioral health or substance use disorder services—the Department of Mental Health and Addiction Services and the Behavioral Health Advocate.
• Public Hearing and Plan for Continued Access: The CON Program must hold a public hearing for the CON Panel’s review. The hospital must also submit a plan for ensuring continued access to services at least 60 days before the proposed pause or termination (or within 14 days for unplanned events outside the hospital’s control). The CON Program will monitor implementation, and failure to comply with an approved plan may result in a performance improvement plan and, ultimately, civil penalties.

How Pullman & Comley Can Help

Connecticut’s CON law overhaul represents a significant shift in health care regulatory compliance, creating both new opportunities and new obligations for providers across the state. Whether you are planning an acquisition, expansion, service change, or facility relocation, understanding how the changed regulatory landscape will  affect your organization is critical to strategic planning and regulatory compliance.

Pullman & Comley’s Health Care practice team has broad experience advising hospitals, physician groups, behavioral health providers, and other health care organizations on CON applications, health care transactions, and regulatory compliance throughout Connecticut. Should you have any question on how the new law impacts your current operations and future organizational goals, please contact Steve Cowherd, Isabelle Bibet-Kalinyak, or Mike Kurs.