Limit the Scope of Certificate of Need Laws.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 494

Short Title: Limit the Scope of Certificate of Need Laws. (Public)
Sponsors: Senator Jarvis (Primary Sponsor).
Referred to: Rules and Operations of the Senate
March 26, 2025
*S494-v-1*
A BILL TO BE ENTITLED 1
AN ACT ENCOURAGING T HE EXPANSION OF HEAL TH CARE ACCESS BY 2
ELIMINATING CERTIFICATE OF NEED LAWS IN ALL COUNTIES EXCEPT THOSE 3
THAT HAVE A POPULATI ON OF LESS THAN ONE HUNDRED THOUSAND AND 4
AT LEAST ONE FUNCTIONING HOSPITAL. 5
The General Assembly of North Carolina enacts: 6
SECTION 1. Article 9 of Chapter 131E of the General Statutes is amended by adding 7
a new section to read: 8
"§ 131E-175.5. Scope of Article. 9
This Article applies only to counties that meet both of the following criteria: 10
(1) Have a population of less than 100,000 according to the most recent federal 11
decennial census. 12
(2) Have at least one functioning hospital within the county." 13
SECTION 2. Effective November 21, 2025, Section 3.2 of S.L. 2023 -7 reads as 14
rewritten: 15
"SECTION 3.2.(a) G.S. 131E-176, as amended by Section 3.1 of this act, reads as rewritten: 16
"§ 131E-176. Definitions. 17
The following definitions apply in this Article: 18
… 19
(9b) Health service facility. – A hospital; long -term care hospital; rehabilitation 20
facility; nursing home facility; adult care home; kidney disease treatment 21
center, including freestanding hemodialysis units; intermediate care facility 22
for individuals with intellectual disabilities; home health agency office; 23
diagnostic center; hospice office, hospice inpatient facility, hospice residential 24
care facility; and ambulatory surgical facility. The term "health service 25
facility" does not include a qualified urban ambulatory surgical facility. 26
… 27
(16) New institutional health services. – Any of the following: 28
… 29
b. Except with respect to qualified urban ambulatory surgical facilities 30
and except as otherwise provided in G.S. 131E-184(e), the obligation 31
by any person of a capital expenditure exceeding four million dollars 32
($4,000,000) to develop or expand a health service or a health service 33
facility, or which relates to the provision of a health service. The cost 34
of any studies, surveys, designs, plans, working drawings, 35
specifications, and other activities, including staff effort and 36
General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 494-First Edition
consulting and oth er services, essential to the acquisition, 1
improvement, expansion, or replacement of any plant or equipment 2
with respect to which an expenditure is made shall be included in 3
determining if the expenditure exceeds four million dollars 4
($4,000,000). Beginning September 30, 2022, and on September 30 5
each year thereafter, the amount in this sub -subdivision shall be 6
adjusted using the Medical Care Index component of the Consumer 7
Price Index published by the U.S. Department of Labor for the 8
12-month period preceding the previous September 1. 9
… 10
(21a) Qualified urban ambulatory surgical facility. – An ambulatory surgical facility 11
that meets all of the following criteria: 12
a. Is licensed by the Department to operate as an ambulatory surgical 13
facility. 14
b. Has a single specialty or multispecialty ambulatory surgical program. 15
c. Is located in a county with a population greater than 125,000 according 16
to the 2020 federal decennial census or any subsequent federal 17
decennial census. has elected to opt out of the certificate of need 18
requirements prescribed by this Article by obtaining a license as a 19
qualified ambulatory surgical facility under Part 4 of Article 6 of this 20
Chapter. 21
… 22
(24f) Specialty ambulatory surgical program. – A formal program for providing on 23
a same -day basis surgical procedures of the same surgical specialty and 24
authorized by its certificate of need, if a certificate of need is required. 25
…." 26
"SECTION 3.2.(b) G.S. 131E-146 is amended by adding a new subdivision to read: 27
"(3) "Qualified urban ambulatory surgical facility" means an ambulatory surgical 28
facility licensed under this Part that has elected to opt out of the certificate of 29
need requirements prescribed by Article 9 of this Chapter and demonstrates to 30
the satisfaction of the Department that the facility meets the definition of 31
G.S. 131E-176(21a).both of the following criteria: 32
a. Has a single specialty or multispecialty ambulatory surgical program. 33
b. Has agreed to adhere to the charity care and reporting requirements 34
established by G.S. 131E-147.5." 35
"SECTION 3.2.(b1) G.S. 131E-147 reads as rewritten: 36
"§ 131E-147. Licensure requirement. 37
(a) No person shall operate an ambulatory surgical facility or a qualified ambulatory 38
surgical facility without a license obtained from the Department. 39
(b) Applications shall be available from the Department, and each application filed with 40
the Department shall contain all necessary and reasonable information that the Department may 41
by rule require. A license shall be granted to the applicant upon a determination by the 42
Department that the applicant has complied with the provisions of this Part and the rules 43
promulgated by the Commission under this Part. The Department shall charge the applicant a 44
nonrefundable annual base license fee in the amount of eight hundred fifty dollars ($850.00) plus 45
a nonrefundable annual per-operating room fee in the amount of seventy-five dollars ($75.00). 46
(c) A license to operate an ambulatory surgical facility or a qualified ambulatory surgical 47
facility shall be annually renewed upon the fi ling and the department's approval of a renewal 48
application. The renewal application shall be available from the Department and shall contain all 49
necessary and reasonable information that the Department may by rule require. 50
…." 51
General Assembly Of North Carolina Session 2025
Senate Bill 494-First Edition Page 3
"SECTION 3.2.(c) Part 4 of Article 6 of Chapter 131E of the General Statutes is amended 1
by adding a new section to read: 2
"§ 131E -147.5. Charity care requirement for qualified urban ambulatory surgical 3
facilities; annual report. 4
(a) The percentage of each qualified urban ambulatory surgical facility's total earned 5
revenue that is attributed to self -pay and Medicaid revenue shall be equivalent to at least four 6
percent (4%), calculated as follows: the Medicare allowable amount for self -pay and Medicaid 7
surgical cases minus all revenue earned from self-pay and Medicaid cases, divided by the total 8
earned revenues for all surgical cases, divided by the total earned revenues for all surgical cases 9
performed in the facility for procedures for which there is a Medicare allowable fee. 10
(b) Each qualified urban ambulatory surgical facility shall annually report to the 11
Department in the manner prescribed by the Department the percentage of the facility's earned 12
revenue that is attributed to self -pay and Medicaid revenue, as calculated in accordanc e with 13
subsection (a) of this section." 14
"SECTION 3.2.(d) Subsections (a) through (c) of this section become effective two years 15
from the date the Department of Health and Human Services (DHHS) issues the first directed 16
payment in accordance with the Healt hcare Access and Stabilization Program (HASP) under 17
G.S. 108A-148.1, as enacted by Section 1.4 of this act, and applies to activities occurring on or 18
after that date. The Secretary of Health and Human Services shall notify the Revisor of Statutes 19
when the DHHS has issued the first directed payment in accordance with HASP and the date of 20
issuance. If the DHHS has not made any HASP directed payments by June 30, 2025, then 21
subsections (a) and (b) of this section shall expire on that date. 22
"SECTION 3.2.(e) Except as otherwise provided, this section is effective when it becomes 23
law." 24
SECTION 3. Section 3.3 of S.L. 2023-7 is repealed. 25
SECTION 4. Except as otherwise provided, t his act is effective when it becomes 26
law. 27