Certificate-of-need exemption fuels hospital’s outpatient imaging expansion in growing market
A certificate-of-need law exemption is fueling one health system’s outpatient imaging expansion in a growing marketplace.
West Virginia carved out a CON concession for certain diagnostic imaging services in 2023, making it easier for local providers to add new MRI or CT scanners. Valley Health—a six-hospital local nonprofit—has capitalized since, adding new outpatient imaging services in the Berkeley County community of Spring Mills, West Virginia, Public Broadcasting reported Monday.
The state’s eastern panhandle is its fastest growing, with population metrics a driving reason why Valley Health recently purchased its new CT and MRI machines.
“There’s been growth in the market, which would increase the demand,” Jacob Meza, Valley Health’s VP of operations, told the news outlet. “But honestly, the demand has been here for a long time. This has been a need that we’ve identified years ago that we’re still working on.”
CON laws are state regulatory mechanisms for approving major capital expenditures for certain healthcare facilities, according to the National Conference of State Legislatures. Such regulations are meant to control costs and avoid unnecessary or duplicative expansion in a defined geography. However, critics have accused providers of wielding CON laws inappropriately to limit competition. About 35 states and Washington operate certificate-of-need programs, according to the NCSL.
West Virginia Gov. Patrick Morrisey (R) has advocated to eliminate the state’s process, WVPB noted. However, efforts to overturn the local CON law in West Virginia’s legislature failed in 2022 and 2024. Instead, Senate Bill 613 carves out certain exemptions for the specialty. They include if a physician-owned private practice is buying an MRI machine, with 75% or more of the scans expected to be used for its own patients.
Meza said Valley Health providers requested the additions to address wait times for radiology services.
“Physicians can refer patients for advanced imaging MRI and CT with the goal of being able to get in much quicker, at a lower cost or price point for patients that are insured or uninsured in our area,” he told the outlet. “Most hospitals experience a long wait time for advanced imaging. There’s a high demand.”
Several other states also have relaxed their certificate-of-need laws in recent years amid staffing shortages and rising patient volumes. New Hampshire repealed its CON law in 2016, while Florida followed suit in 2019 and Montana in 2021, with the latter two carving out exceptions for nursing homes. North Carolina raised the dollar threshold for CON regulations related to new diagnostic center equipment in 2023, and Tennessee removed requirements pertaining to new PET and MRI scanners last year.
Andrew Colbert, senior managing director of Ziegler, said last month that he sees this as a growing trend.
“CON laws are definitely something that we’re watching,” he said. “Our view is they’re going to continue to get relaxed and particularly under the current administration,” he added, noting that Southeastern states are particularly ripe for reform.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.