Florida Has Repealed Certain CON Requirements. How Does This Affect Rehab Hospitals?

Certificate of Need (CON) is a public policy tool which seeks to slow healthcare cost growth, avoid duplication of programs and services and ensure that new development meets the needs of the community. Nationally, only 12 states have no CON requirements. In Florida, the CON program was enacted in 1973 and applied to the building of new health centers or expansion of certain, complex medical services – including hospitals, nursing facilities, hospices and intermediate care facilities for the developmentally disabled.

The CON regulation has been controversial ever since it was imposed nearly 50 years ago. While there have been tweaks to the Florida CON law over time, in 2019 House Bill 21 eliminated, on a phased-in basis, regulation for hospital projects. (The new legislation maintained the CON requirements for the development of nursing facility or hospice programs.)

Critics are pleased with the phased-in repeal of certain CON requirements -- they believe it will create not only greater access for patients to needed services but a new competitive environment among hospitals. While the new law creates opportunities for hospitals to build new facilities or expand services, the drafting of the legislation also creates confusion for hospital providers.

Florida Has Repealed Certain CON Requirements

CON Repeal Effective Dates

CON repeal for hospitals will be phased in as follows:

  • CON for LTACs and other Class 1 General Acute Care Hospitals will be repealed effective July 1, 2019
  • CON for “Tertiary Services” provided in General Acute Care Hospitals, including comprehensive rehabilitation, will be repealed effective July 1, 2019
  • CON for Class 3 Specialty Hospitals, including Rehabilitation Hospitals and Psychiatric Hospitals, will be repealed effective July 1, 2021

What does this mean for acute rehabilitation units and freestanding rehabilitation hospitals?

The need for CON approval for the development of new freestanding specialty rehabilitation hospitals will remain in effect until July 1, 2021.

However, there is significant opportunity for hospitals to expand their tertiary services – including the creating of hospital-based acute rehabilitation units – beginning July 1, 2019. General acute care hospitals can open acute rehabilitation units at any time; however, the beginning of their hospital’s cost report year is preferable, so that the hospital can open exempt from the prospective payment systems.

How Kindred Rehabilitation Services can help

At Kindred Rehabilitation Services we have a strong history of partnering with general acute care hospital partners to open, manage and operate dedicated acute rehabilitation units within the host hospital, under a management agreement whereby the hospital retains 100% ownership. Additionally, Kindred’s management of hospital-based acute rehab units helps create high-quality patient outcomes and positive patient engagement.

In 2018, Kindred’s managed acute rehabilitation units exceeded national quality benchmarks, delivering greater functional improvement, shorter lengths of stay and lower rehospitalizations than our peers. 

Kindred leaders are also skilled in navigating the myriad laws, regulations and guidelines that govern the complicated rehabilitation sector. Additionally, we collaborate with the federal Centers for Medicare and Medicaid Services (CMS) and other regulatory agencies – including state-based agencies – to maintain compliance protocols that far exceed regulatory standards. This focused compliance expertise and ongoing monitoring of regulatory changes relieves the burden on the partner-hospital administration for our managed acute rehabilitation units.

Contact us today if you would like to learn more about how the repeal may impact your facility and if you are thinking of opening an acute rehab unit.