Certificate of Need in Florida: Application, Review, and Challenges

A Certificate of Need in Florida is state approval from the Agency for Health Care Administration (AHCA) that you must obtain before opening, expanding, or converting certain healthcare facilities. Since the legislature narrowed the program, CON review now applies mainly to nursing homes, hospice programs, and a short list of related facility types. You get one by filing a letter of intent and a full application during a scheduled batching cycle, then competing against other applicants on need, finances, quality of care, and access for underserved populations.

Which Projects Still Require a CON

The program is much smaller than it once was. Under CS/HB 21, general hospitals, complex medical rehabilitation beds, and tertiary hospital services were freed from CON review effective July 1, 2019, and specialty hospitals followed on July 1, 2021.¹ If your project is a hospital or hospital service, CON almost certainly does not apply to you.

What still triggers review under Section 408.036:

Adding beds to a community nursing home or an intermediate care facility for the developmentally disabled through new construction or alteration.
Constructing or establishing a new healthcare facility, unless it is a replacement facility on the same site or within one mile that does not increase bed counts.
Converting one type of healthcare facility to another, including converting a general hospital, specialty hospital, or long-term care hospital.
Establishing a new hospice program or hospice inpatient facility.

AHCA has exclusive authority to decide whether a specific project falls under CON review.² If your project sits on the line, ask AHCA before you build the rest of your plan around an assumption.

Expedited Review and Exemptions

Not every project that touches a CON-regulated facility type has to run the full competitive gauntlet. Florida law provides two faster paths.

Expedited Review

Some projects skip the competitive batching process:

Transferring an existing CON from one holder to another.
Replacing a nursing home when the new site is within 30 miles of the existing facility. If the new site is outside the original subdistrict, the prior six-month occupancy rate in the proposed subdistrict must be at least 85 percent.
Relocating a portion of a nursing home’s beds to another facility or a new facility within the same or a contiguous district, as long as the move stays within 30 miles and the total statewide bed count does not increase.
New nursing home construction in a retirement community where at least 25 percent of the county population is age 65 or older and the bed-to-population ratio does not exceed 16.1 beds per 1,000 persons age 65 and older.

Exemptions

Some projects can be exempted from CON review entirely on request. These include hospice services or swing beds in a rural hospital (up to half of licensed beds), conversion of acute care beds to skilled nursing beds in a rural hospital without new construction, additions of nursing home beds at long-established retirement community skilled nursing facilities for exclusive resident use, and facilities built for the exclusive use of the Department of Corrections. A nursing home replacement project may also add up to 30 beds or 25 percent of the replaced beds, whichever is less, without triggering full review.²

What AHCA Looks For

AHCA evaluates each application against the criteria in Section 408.035.³ The central question is whether the community needs the proposed service. Applicants have to align their proposal with the state’s published need projections, known as the Fixed Need Pool. AHCA calculates these by planning district and publishes them in the Florida Administrative Register before each batching cycle. If the pool shows zero additional beds needed in your district, your application starts in a hole.

Beyond raw need, AHCA weighs the availability and adequacy of similar services already operating in your district, whether alternatives like outpatient or home care could serve the same population, and whether the proposal would create efficiencies through shared or cooperative resources. Your track record counts. If you have run healthcare facilities before, AHCA will examine your compliance history.

Financial feasibility is the other pass-or-fail test. The project must pencil out in both the short and long term, with adequate capital and operating resources to sustain the facility. The application must also show that services will be accessible to all district residents, including underserved populations. That accessibility requirement is not boilerplate. Applications that cannot explain how they will serve Medicaid patients and medically underserved communities are vulnerable to denial.

Filing the Application

Letter of Intent

Every competitive application starts with a Letter of Intent filed at least 30 days before the application deadline for the relevant batching cycle. The LOI is substantive. It must describe the proposed project, specify the number of beds where applicable, identify the services you plan to provide, name the subdistrict location, and identify the applicant.⁴ Within 21 days of filing, AHCA publishes notice in the Florida Administrative Register, which alerts competitors and interested parties. Projects that qualify for expedited review do not require an LOI.

Financial Documentation

Financials are the heaviest lift. You must submit AHCA’s Proof of Financial Ability to Operate form, which requires a pro forma balance sheet, a pro forma cash flow statement, and a pro forma income-and-expense statement covering the first two years of operation. The projections must demonstrate that you have enough assets, credit, and projected revenue to cover all liabilities and expenses.⁵ Statements should follow generally accepted accounting principles. Thin or unrealistic numbers sink otherwise strong applications.

Fees

The application fee is $10,000 plus 1.5 percent of the total proposed expenditure, capped at a combined $50,000.⁶ Build the fee into your project budget early.

Batching Cycles and Comparative Review

AHCA does not review applications on a rolling basis. It groups competing applications into batching cycles so that similar proposals for the same district are evaluated side by side. Nursing home and ICF/DD applications have their own cycles, and hospice applications are batched separately. Each type runs roughly twice a year. AHCA publishes the Fixed Need Pool before each cycle, followed by LOI and application deadlines.⁷

Once the application deadline closes, AHCA reviews your submission for completeness and sends a written response flagging anything missing. You have a limited window to fix it. Miss that window and your application can be pulled from the cycle, which means waiting for the next one. When all applications in the batch are complete, AHCA conducts a comparative review and issues a State Agency Action Report with a preliminary decision on each.

Comparative matters. If three applicants are competing for the same pool of nursing home beds in one district, AHCA does not grade each application in isolation. The one that best shows need, financial strength, quality of care, and accessibility for underserved populations wins.

Challenges From Existing Providers

After AHCA publishes notice that an LOI has been filed, interested parties, including existing providers who see your project as competition, can request a public hearing. It is held locally within 21 days after the application is deemed complete.⁴ Competitors can and do challenge applications, and they sometimes file competing applications in the same batch. If AHCA’s preliminary decision is contested, the fight can escalate to a formal administrative hearing before the Division of Administrative Hearings, where an administrative law judge evaluates the evidence and issues a recommended order to AHCA. Contested proceedings add months and legal cost, so plan for opposition in any market with established providers.

After You’re Approved

A CON terminates three years after issuance unless you have started construction, for projects involving building, or made an enforceable capital expenditure commitment, for projects that do not. AHCA monitors your progress against the project timetable described in your application and can revoke the CON if you are not meeting that timetable and not making a good-faith effort to do so. If the delay comes from litigation or a government permitting holdup outside your control, you can request an extension.⁸

CONs approved with conditions carry ongoing reporting duties. Condition compliance reports for the preceding year are due by April 1. Failure to comply with any condition tied to your CON can trigger administrative fines of up to $1,000 per day per violation, with proceeds going to the Public Medical Assistance Trust Fund.⁹ AHCA continues monitoring the project until the facility is licensed and operational, so treat condition compliance as a standing obligation, not a one-time hurdle.

1
Florida Senate. CS/HB 21 Final Bill Analysis
2
Florida Senate. Florida Code 408.036 – Projects Subject to Review; Exemptions
3
Florida Senate. Florida Code 408.035 – Review Criteria
4
Florida Senate. Florida Code 408.039 – Review Process
5
Legal Information Institute. Florida Administrative Code 59A-35.062 – Proof of Financial Ability to Operate
6
Florida Senate. Florida Code 408.038 – Fees
7
Florida Agency for Health Care Administration. Certificate of Need Competitive Review-Batching Cycles
8
Florida Senate. Florida Code Chapter 408 – Health Care Administration
9
Florida Agency for Health Care Administration. Certificate of Need (CON) Program Overview