The Certificate of Need Process 

The Healthcare Planning and Certificate of Need Section of the Division of Health Service Regulation of the North Carolina Department of Health and Human Services (the “Agency”) recently issued guidance regarding the impact of COVID-19 on the certificate of need (“CON”) process. 

North Carolina’s CON Law, codified at N.C. Gen. Stat. § 131E-175 et seq., requires persons proposing to offer or develop “new institutional health services” to file a CON application and obtain a CON.  For example, a provider wishing to add an operating room or acquire an MRI scanner must first obtain a CON.  North Carolina’s CON Law remains in effect during the pandemic.  Though most of the Agency’s staff are teleworking, all aspects of the CON program are unchanged by the pandemic, except for public hearings. Please see below for a discussion of these changes, in addition to helpful considerations regarding the application process. 

Tips for Applying for a CON: 

• Application deadlines and review schedules are unchanged. 
• Applications must still be received by no later than 5:30 p.m. on the 15th day of the month prior to the beginning of the applicable review period. When the 15th falls on a weekend or holiday, the deadline is 5:30 p.m. on the next business day.
• Applications MAY NOT be submitted electronically but may be mailed. Applications must be received, not postmarked, by the deadline.
• Filing fees must still be submitted in the form of a paper check, and wire transfers and electronic funds WILL NOT be accepted. 
• Preapplication conferences (i.e., meetings to ask staff questions before the application is submitted) can be conducted by phone; videoconference is not an option.  The Agency prefers that applicants circulate conference call dial in numbers.

Changes to Public Hearings: 

• The Agency has cancelled all public hearings scheduled for April, and no public hearings will be scheduled for the foreseeable future due to the COVID-19 pandemic.
• Public hearings are scheduled only if they are required by law. The law requires that a public hearing be held if the capital cost of a project proposed in a certificate need application is $5,000,000 or more, the review is competitive, or a written request to hold a public hearing is received by the Agency during the 30-day public comment period for the review. N.C. Gen. Stat. § 131E-185(a1)(2).
• Currently, the Agency asks that no one request a public hearing, as the locations where public hearings are typically held are unavailable. 
• Instead, persons who would have made remarks at a public hearing will be allowed to submit their remarks in writing, via email, to the Agency.  The remarks must be received no later than 5:30 p.m. on the 20th day after the last day to submit written comments.  This is the deadline for scheduling public hearings in N.C. Gen. Stat. § 131E-185(a1)(2).  
• The Project Analyst will ask the applicant for a written response to all comments received during the 30-day public comment period and any written remarks submitted in lieu of speaking at a public hearing.  The applicant’s response will be a public record. 

Correspondence to the CON Section

For some time, the Agency has encouraged parties to submit correspondence such as progress reports, no review requests, exemption requests and material compliance determination requests electronically, and that process should continue to be followed.   Correspondence for projects in Health Service Areas I, II and III should be directed to disraeliza.flores@dhhs.nc.gov.  Correspondence for projects in Health Service Areas IV, V and VI should be directed to martha.waller@dhhs.nc.gov.

Contested Case Hearings at the North Carolina Office of Administrative Hearings 

After a decision of the Agency to issue, deny or withdraw a certificate of need or exemption or to issue a certificate of need pursuant to a settlement agreement with an applicant to the extent permitted by law, “affected persons” are entitled to contested case hearings under Article 3 of Chapter 150B of the North Carolina General Statutes. Contested cases are filed in the North Carolina Office of Administrative Hearings (“OAH”).  OAH has taken a multi-faceted approached to COVID-19. Though OAH must comply with state-mandated orders, the North Carolina Administrative Procedure Act requires contested case hearings to remain open to the public. 

In response to Governor Cooper’s Executive Order and Chief Justice Beasley’s Order and subsequent memorandum dated March 13, 2020 and March 15, 2020, respectively, all OAH personnel have been encouraged to remain at home by telecommuting. A small number of managerial employees are physically present at OAH on a staggered basis to ensure coordination of operations and availability for emergency orders. In addition, a notice discouraging entry for those potentially suffering from COVID-19 has been placed on the exterior entrances to the building. OAH strongly encourages all visitors to use technology such as e-filing, email, telephone, and voicemail to communicate and transact business with OAH, and physical visits are discouraged unless absolutely necessary. 

Hearings Division: 

• The Hearings Division of OAH is complying with Chief Justice Beasley’s order to reschedule all cases no sooner than April 16, 2020. OAH has also installed technology for remote access in its courtrooms. Judges may order parties, after consultation and preferably consent, to conduct hearings remotely. 
• The OAH Clerk’s Office remains open to the public for document and pleading filings electronically, via the e-filing system, email by attachment, and fax. Paper filings are accepted for some types of filings but are strongly discouraged. 
• In addition, due to the state of emergency declared by Governor Cooper due to the pandemic, OAH has invoked the waiver provision of the North Carolina Administrative Code, 26 NCAC 01.0105, allowing it to waive all time limitations in Title 26, Chapter 3 of the North Carolina Administrative Code, except for the deadline for Administrative Law Judges to issue final decisions or orders under 26 NCAC 03.0127.  

Visit oah.nc.gov for more information.