Virginia’s Certificate of Public Need Laws

A Prescription for Protecting Monopolies & Preventing Patient Choice

Archaic laws and government regulations continue to prevent access to health care for this country’s older Americans.  In many cases, these old laws and regulations simply act as financial and bureaucratic barriers for health care providers in order to protect an established provider’s medical monopoly in the local market.

A good example is just outside of Washington D.C. in the state of Virginia.  Any health care provider in Virginia that seeks to make a major investment – anything from opening a new facility to purchasing a CAT scan machine or adding a parking garage to an existing hospital – must seek prior approval from the Virginia Health Commissioner. Virginia law requires state regulators to determine whether a health care provider’s proposed investment is needed in that community, and if it is, they grant a “Certificate of Public Need” (COPN).  The approval process requires an upfront application fee up to $20,000 and can take up to nine months to complete.  The hospital cannot move forward with its plans without the COPN golden ticket.

Enacted more than 40 years ago, Virginia’s COPN law was designed to keep health care costs down, and allow for coordinated planning of services. However, this antiquated law has done nothing but suppress competition, increase costs, and limit access to medical services.

In fact, in 2004, both the Federal Trade Commission and the Department of Justice found that COPN programs actually contribute to rising prices because they inhibit competition. As a result, the FTC and DOJ urged states like Virginia, which continue to have these burdensome review processes to “reconsider whether they are best serving their citizens’ health care needs by allowing these programs to continue.”

The federal government rescinded the COPN requirement decades ago and while many states have changed their laws, Virginia has stayed the same.  Over the past 40 years, medical advances have transformed our health care system but outdated laws like COPN are limiting patient’s ability to access 21st century health care services.

Facts About COPN Laws

 1.  How old is Virginia’s COPN (Certificate of Public Need) law?

a) 10 years old
b) 20 years old
c) 30 years old
d) 40 years old

d) 40 years old

Virginia enacted its Certificate of Public Need laws in alignment with a federal law requiring the regulation of the healthcare market. The federal law was later repealed, and Virginia remains one of 35 states that regulates the services a hospital can offer, prohibiting providers from entering new markets, or making changes to their existing services without the permission of the state.

 2.  How do COPN laws affect every day Virginians?

a) Increases Healthcare Costs
b) Restricts Access to Services
c) Prevents the Addition of New Providers
d) All of the Above

d) All of the Above

Virginia’s COPN laws regulate 19 services, and all hospitals, as well as many individual healthcare providers. As a result, Virginia has high costs for specialized services, has a shortages of mental health beds, and in many parts of the state lacks equitable access to life saving care. For example, only 22 of the 52 hospitals with a maternity ward have a neonatal intensive care unit (NICU) capable of providing basic NICU care and emergency services. This means that a critically ill infant could spend the first hour of its life on the road to another facility rather than receiving life-saving care immediately and in the presence of the parents.

 3.  Of the 80 rural hospitals that have closed since 2010, _____% were in states with COPN laws.

a) 0%
b) 25%
c) 40%
d) 70%

d) 70%

University of North Carolina research shows that of the 80 rural hospital closures January 2010 – 2017, 70% were in states with CON laws and only 30% of the rural hospital closures were in state without CON regulation.

 4.  Virginia ranks _____ in our capacity to treat patients overnight.

a) in the bottom third
b) in the top half
c) in the top 10%

a) Virginia ranks in the bottom third in our capacity to treat patients overnight.

Virginia ranks in the bottom third of all states for its capacity to treat patients overnight, but is the twelfth most populous state. In addition, any hospital wanting to add rooms for patient care – both medical and mental healthcare – is required to get a COPN. Virginia’s mandatory review process puts government regulators – not doctors and hospitals – in charge of deciding what medical care options patients have. This system actively blocks access to an adequate amount of beds for overnight patients statewide.

 5.  Do COPN laws regulate all hospitals the same way?

a) Yes, all hospitals are treated exactly the same throughout the process.
b) No, certain hospitals have distinct advantages in the COPN process.

b) No, certain hospitals have distinct advantages in the COPN process.

In Virginia, hospitals are allowed to appeal the COPN applications of other hospitals and medical facilities. If the COPN board finds that the addition of the new service or equipment would negatively impact another facility in a “reasonable area” then the Certificate of Need could be denied. For example, INOVA was able to block the building of a new hospital in Loudon country for upwards of 10 years to protect its “market share” in Northern Virginia.

 6.  True or False: COPN laws increase the quality of healthcare options by restricting the supply.


There is no correlation between states with COPN laws and higher quality of healthcare. In fact, healthcare providers seeking to provide new services or introducing new technology in Virginia can be blocked by existing services. As a result, the laws stifle access to innovate medical treatments and techniques.

 7.  What is the purpose of having a COPN Process? 

According to the VA Health Commissioner, the COPN’s object is to “contain healthcare costs while ensuring financial viability and access to healthcare for all Virginia at a reasonable cost.” Virginia has had a certificate of public need program since 1973 and, unfortunately, healthcare costs have risen dramatically and there are still underserved areas throughout the Commonwealth.