Licensure and Certificate of Need Considerations

Formal consolidation of independent hospitals may entail the creation of a new organization from the perspective of state regulators. If so, the parties need to consider whether a new entity will require licensure and accreditation for participation in governmental and private payment programs, which can entail significant delays in achieving operational objectives. In addition, in states that require certificates of need for facilities, the parties need to evaluate whether a proposed affiliation will trigger regulatory oversight under these laws or other state regulations on transfer of ownership of facilities.