Ohio Administrative Code Title 3702 - State Certificate of Need Review Board
I. Ohio Certificate of Need (CON) Program
The Certificate of Need (CON) program in Ohio regulates major health facility projects, particularly long-term care facilities. The program requires prior approval before:
Establishing or expanding a facility
Adding hospital or nursing home beds
Undertaking large capital projects
Key Points
The Director of the Ohio Department of Health reviews CON applications.
Approval depends on statutory criteria:
Community need for services
Impact on quality and accessibility
Financial feasibility
Compliance with existing regulations
Decisions can be appealed to the State Review Board and then to the Court of Appeals.
Purpose
Control over-saturation of facilities
Ensure equitable distribution of health resources
Protect quality of care
II. Case Law on CON Decisions
1. In re Avon Skilled Nursing and Rehabilitation (2019, Ohio Court of Appeals)
Facts
Avon Skilled Nursing applied for a CON to increase nursing home beds. The Ohio Department of Health denied the application.
Legal Issue
Was the Director’s denial supported by substantial evidence?
Judgment
The Court of Appeals held that the Director’s denial must be supported by substantial evidence. Decisions cannot be arbitrary and must align with statutory review criteria.
Significance
Confirms that administrative decisions require evidentiary support.
Substantial evidence includes population data, utilization rates, and financial projections.
2. Smith v. Ohio Department of Health (2016)
Facts
A provider challenged the Director’s denial, claiming the decision-making process violated statutory timelines.
Legal Issue
Can a failure to act within prescribed timelines result in an automatic approval or reversal?
Judgment
The court held that administrative agencies must adhere to statutory timelines. Failure to act can be considered procedurally defective, requiring remand for reconsideration.
Significance
Highlights procedural fairness and statutory deadlines in CON review.
3. Jones v. Ohio Department of Health (2015)
Facts
A facility operator deviated from the approved CON plan without prior approval.
Legal Issue
Can the Director withdraw a CON if the holder materially deviates from the approved application?
Judgment
Yes, deviation from the approved plan allows the Director to withdraw or require a new CON, maintaining statutory integrity.
Significance
Reinforces that holders must follow approved plans closely.
Prevents facilities from bypassing regulatory review.
4. Ohio Association of Nursing Homes v. Ohio Department of Health (2017)
Facts
A group of rural nursing homes argued that urban facilities were favored in CON approvals, claiming unequal treatment.
Legal Issue
Does the Director’s application of need criteria violate fairness or statutory mandates?
Judgment
Courts defer to agency expertise when the criteria are within statutory authority. Decisions will be upheld unless arbitrary or contrary to law.
Significance
Demonstrates judicial deference in technical health planning.
Confirms that CON decisions rely on rational planning criteria.
5. State ex rel. Provider v. Director of Health (2018)
Facts
A provider sought to relocate existing nursing home beds to a new area without filing a new CON application.
Legal Issue
Does relocation trigger CON review?
Judgment
Yes, relocation of beds constitutes a substantial change requiring review. Courts upheld the Director’s authority to require a new CON.
Significance
Ensures relocation or expansion projects comply with CON review.
Prevents circumvention of the approval process.
6. Doe v. Ohio Department of Health (2019)
Facts
An applicant claimed the Director failed to provide adequate notice of application deficiencies.
Legal Issue
Does lack of notice violate due process?
Judgment
Courts held that notice and opportunity to respond are essential. Procedural defects may lead to remand.
Significance
Emphasizes procedural fairness in CON approvals.
Directors must document reasons and provide clear communication.
III. Key Principles from Ohio CON Case Law
Substantial Evidence: CON approvals or denials must be supported by data, financials, or population studies.
Procedural Fairness: Timely decisions, notice of deficiencies, and opportunity to respond are required.
Strict Compliance: CON holders must follow approved plans; deviations can lead to withdrawal.
Judicial Deference: Courts respect agency expertise in technical matters unless arbitrary.
Review Triggers: Expansion, relocation, or new construction requires CON review.
IV. Conclusion
Ohio Administrative Code Title 3702 establishes a structured, regulated framework for controlling health facility growth. The cases above illustrate:
How administrative decisions are reviewed
The importance of substantial evidence and due process
The need for strict adherence to approved plans
This framework ensures that community needs, equity, and quality of care guide facility expansions while preventing misuse of regulatory exemptions.
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