Companion Bills To Repeal CON Laws Filed In House And Senate

By Jeff Moore
Carolina Journal

State lawmakers filed legislation last week to repeal North Carolina’s Certificate of Need (CON) laws, taking aim at the healthcare regulatory regime that restricts the establishment or expansion of healthcare facilities and services in the state.

The laws require health care providers to secure a “certificate of need” before building new facilities, adding hospital beds, or buying major medical equipment. The process of securing a CON takes time and money. Competitors can tie up CON decisions in lengthy court battles, or even obtain a CON so their competition cannot.

Critics point to CON as a contributing factor in North Carolina’s unenviable position as the highest cost healthcare market in the nation, representing a purely bureaucratic barrier that propels rising healthcare costs and limits to accessibility.

While more piecemeal reforms of CON regulations have been enacted and proposed, Senate Bill 370 (and its companion House Bill 455) aim for a wholesale repeal of the laws.

“North Carolina’s certificate of need laws are generally unnecessary and antiquated,” Sen. Benton Sawrey, R-Johnston, a primary sponsor of the senate legislation, told Carolina Journal. “There are a few places that reform and tweaks make sense, but on the whole, we need to toss out the current regulatory scheme and let the market drive these decisions.”

The bill would eliminate North Carolina’s CON requirements under Article 9 of Chapter 131E, removing the need for state approval to establish or expand certain healthcare facilities and services, effective January 1, 2026. In addition to Article 9, the bill repeals several related statutes (e.g., G.S. 130A-45.02(i), G.S. 143B-1292) to fully dismantle the CON framework.

It also necessarily updates various General Statutes to remove references to CON requirements, redefines terms like “health care facility,” and adjusts licensing and operational rules to reflect the repeal.

The updated definition of “health care facility” removes reliance on the previous CON-specific references and instead provides a standalone, comprehensive list of facility types.

The constitutionality of the CON regime has been challenged in court multiple times. Last October, the NC Supreme Court vacated a lower court decision in one such challenge, keeping the legal case against CON alive.

Sponsors of SB370 are not content to wait for court rulings to potentially overturn CON, though. As a matter of state policy, law makers like Sawrey believe state bureaucrats should play no part in restricting healthcare offerings within the Tar Heel State.

“Our hospitals and health businesses are sophisticated enough to determine whether need exists to stand-up new outpatient facilities or purchase equipment,” said Sawrey. “The state does not need to play gatekeeper, which only adds costs that get passed onto the patient.”

Jeff Moore is Carolina Journal’s deputy editor. Moore has worked extensively in conservative politics, policy, and media in North Carolina, including most recently as the North Carolina Republican Party’s communications director.