Conditions on Certificates of Need: Approval at What Price?

Abstract

Providers and health planning agencies familiar with the federaily mandated Section 1122 and certificate of need (CON) programs had mixed reactions to the passage of the 1979 amendments to the National Health Planning and Resources Development Act (the 1979 Planning Act Amendments), especially the addition of Section 1527 which prescribes specific federal requirements for state CON programs. One of the most controversial provisions of Section 1527 is the so-called conditions amendment, often referred to as the “Satterfield amendment.” The conditions amendment has crystalized by statute a power that many planning agencies had previously assumed and that most hospitals had feared: state health planning and development agencies (SHPDAs) have the legal authority to issue CONs subject to conditions that require applicants to undertake actions unrelated to those for which they sought approval. At the same time, however, the conditions amendment vindicates a notion long held by providers and rejected by some planning agencies: the SHPDA's conditioning power is not unlimited; while some conditions are permissible, others are not.