Virginia's Certificate of Public Need Program
In the early 1970’s, there was a lot of concern about the rising costs of Medicaid and Medicare. In 1972, the Social Security Act began regulations to try to reign in these costs. The National Health Planning and Resources Development Act was passed in 1974. This Act required states to operate Certificate of Public Need (COPN) programs as a condition of receiving federal funding for health care. The federal COPN requirements were premised on providing orderly planning of health systems to meet the “needs” of the defined population and restricting the overbuilding of facilities, which was perceived as responsible for the high costs of medical services. The issues at the time of the issuance of this legislation were access to primary care, distribution of services in medically under-served areas, prevention, costs, utilization review, and education of the public in personal care and in use of the health care system.
Virginia first enacted a COPN law in 1973, one year prior to the federal law requiring state COPN programs. The adoption of the COPN legislation marked the beginning of a new role for the Commonwealth in health care regulation. The State became the regulator of development for all nonfederal medical facilities. For the first time, owners of such facilities were required to obtain prior state approval before undertaking large capital expenditures, an alteration in bed capacity, or a change in service. The Virginia COPN’s objectives included promotion of comprehensive health planning, promotion of the highest quality of health care at the lowest possible cost, the avoidance of unnecessary duplication of medical care facilities, and the provision of an orderly administrative procedure for resolving questions concerning the necessity of construction or modification of medical care facilities.
The Virginia COPN process begins with the applicant filling out an extensive application. An application must be processed for a capital improvement over $400,000, any new institutional services over $250,000, and any modification to the number of beds. The preparation and filing of a COPN application is the most time consuming part of the review process. The applicant must provide extension information about their company and its financial standing. They must prove there is a need for the project and that they can acquire sufficient financing for it. Most importantly, the applicant must present a detailed plan on how their project will be the most cost efficient for the government. It is difficult to ascertain with any certainty the cost of preparing a COPN application. The Virginia Hospital Association estimates that the fee for just applying for a COPN can range anywhere from $500 to $10,000 depending on the project type and size.
Once the application is finished, it is sent to the Bureau of Resources Development (BRD) which is...