Ala. Code
Code of Alabama

Ala. Code § 22-21-263 (2026)

New Institutional Health Services Subject to Review.

✓ official Alabama Legislature (ALISON) text, current July 2026
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(a) All new institutional health services which are subject to this article and which are proposed to be offered or developed within the state shall be subject to review under this article. No institutional health services which are subject to this article shall be permitted which are inconsistent with the State Health Plan. For the purposes of this article, new institutional health services shall include any of the following:

(1) The construction, development, acquisition through lease or purchase, or other establishment of a new health care facility or health maintenance organization. A transaction involving the sale, lease, or other transfer or change of control of an existing health care facility, existing health maintenance organization, or existing institutional health service is not subject to certificate of need review or approval under this article unless the transaction also involves implementing one or more of the new institutional health services described in subdivision (2), (3), or (4). The two immediately preceding sentences are applicable to all transactions occurring on or after July 30, 1979. Notwithstanding anything to the contrary in this article, expenditures incurred in the sale, lease, or other transfer of an existing health care facility or existing health maintenance organization or existing institutional health service shall not be subject to subdivision (2).

(2) Any expenditure by or on behalf of a health care facility or health maintenance organization which, under generally accepted accounting principles consistently applied, is a capital expenditure in excess of two million dollars ($2,000,000) indexed annually for inflation for major medical equipment; in excess of eight hundred thousand dollars ($800,000) for new annual operating costs indexed annually for inflation; in excess of four million dollars ($4,000,000) indexed annually for inflation for any other capital expenditure by or on behalf of a health care facility or a health maintenance organization. The index referenced in this subdivision shall be the Consumer Price Index Market Basket Professional Medical Services index as published by the U.S. Department of Labor, Bureau of Labor Statistics. The SHPDA shall publish this index information to the general public.

(3) A change in the existing bed capacity of a health care facility or health maintenance organization through the addition of new beds, the relocation of one or more beds from one physical facility to another, or reallocation among services of existing beds through the conversion of one or more beds from one category to another within the following bed categories: general medical surgical, inpatient psychiatric, inpatient/residential alcohol and drug abuse or inpatient rehabilitation beds, or long-term care beds including skilled nursing care, intermediate care, transitional care, and swing beds. Notwithstanding any provision of this subdivision to the contrary, any health care facility or health maintenance organization in which at least 65 percent of the beds are dedicated or used exclusively for acute care services, general medical surgical, or nonspecialized services may reallocate existing beds within the following specialized bed categories: inpatient psychiatric, inpatient/residential alcohol and drug rehabilitation beds, to acute care services, or general medical surgical beds without first obtaining a certificate of need from the SHPDA.

(4) Health services proposed to be offered in or through a health care facility or health maintenance organization, and which were not offered on a regular basis in or through such health care facility or health maintenance organization within the 12 month period prior to the time such services would be offered. Health services, other than those health services involving long-term care services, including without limitation, skilled and intermediate nursing home care, swing beds services, or transitional care services, provided directly by acute care hospitals classified as rural by the U.S. Bureau of Census/Office of Management and Budget, United States government Health Care Financing Administration or acute care hospitals with less than 105 beds that are located over 20 miles from the nearest acute health care facility located within Alabama shall not be subject to this subdivision but shall be subject to the other subdivisions of this subsection. Provided, however, that the exemption from this subdivision herein established shall not apply to home health services provided outside of the county in which the hospital is located.

(b) The four conditions of new institutional health services listed in this section shall be mutually exclusive.

(c) Notwithstanding all other provisions of this article to the contrary, those facilities and distinct units operated by the Department of Mental Health and those facilities and distinct units operating under contract or subcontract with the Department of Mental Health where the contract constitutes the primary source of income to the facility shall not be subject to review under this article.

(d) For the purposes of this article, and notwithstanding all other provisions of this article to the contrary and notwithstanding any and all provisions of the State Health Plan on September 1, 2003, relating to lithotripsy, magnetic resonance imaging, and positron emission tomography, new institutional health services, which are subject to this article, shall not include any health services provided by a mobile or fixed-based extracorporeal shock wave lithotripter, mobile or fixed-based magnetic resonance imaging, or positron emission tomography proposed to be offered in or through a health care facility or health maintenance organization. The SHPDA, after consultation with and the advice of the Statewide Health Coordinating Council, in accordance with the Alabama Administrative Procedure Act and within 60 days of September 1, 2003, shall cause the State Health Plan to be amended to repeal and delete all sections of the Alabama State Health Plan relating to mobile and fixed-based lithotripters, mobile and fixed-based magnetic resonance imaging, and positron emission tomography, and cause the amendment and repeal of any other SHPDA rules and regulations inconsistent with this article.

(Acts 1977, 1st Ex. Sess., No. 82, p. 1509, §4; Acts 1982, 2nd Ex. Sess., No. 82-770, p. 249, §3; Acts 1990, No. 90-468, §1; Acts 1993, No. 93-315, p. 473, §1; Acts 1993, No. 93-326, p. 497, §1; Acts 1994, No. 94-369, p. 620, §1; Act 2003-331, p. 810, §1; Act 2013-192, p. 350, §1.)

Notes of Decisions
Cited in 20 cases, 1985–2017 · leading case: Prime Lithotripter Oper. v. Lithomedtech of Alabama, LLC, 855 So. 2d 1085 (Ala. Civ. App. 2001).
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Prime Lithotripter Oper. v. Lithomedtech of Alabama, LLC, 855 So. 2d 1085 (Ala. Civ. App. 2001). · cites it 14× “Code 1975, absent implication of the criteria set forth in § 22-21-263; it also sought a declaration that CON Rule 410-1-4-.”
Auburn Med. Ctr., Inc. v. East Alabama Health Care Auth., 908 So. 2d 243 (Ala. Civ. App. 2003). · cites it 5× “Relevant to this appeal is the amendment of § 22-21-263, Ala.Code 1975, which previously required all health-care facilities to obtain a CON before purchasing any “new institutional health services,” which included MRI machines.”
Pleasure Island Ambulatory Surgery Ctr., LLC v. State Health Plan. & Dev. Agency, 38 So. 3d 739 (Ala. Civ. App. 2008). · cites it 5× “Accordingly, the intended relocation of the facility is “construction” under § 22-21-263(a), thus requiring Infirmary Health to undergo a CON review, and obtain a new CON, in order to relocate the facility.”
HealthSouth of Alabama, LLC v. Shelby Ridge Acquisition Corp., 207 So. 3d 14 (Ala. Civ. App. 2015). · cites it 5× “” § 22-21-263, Aa.Code 1975. B. Appeal No. 2130628: Submission of HealthSouth’s CON Application to Relocate the Carraway Beds On July 29, 2009, SHPDA approved HealthSouth’s acquisition of the Carraway beds.”
Springhill Hospitals, Inc. v. State Health Plan. & Dev. Agency, 224 So. 3d 670 (Ala. Civ. App. 2016). · cites it 2× “Code 1975, thereby qualifying the ASC expansion as a “new institutional health service” for which Surgicare would be required to submit an application for a certificate of need (“CON application”) that would be subject to review by the CONRB.”
HEALTH CARE AUTH. OF ATHENS v. Statewide Health Coordinating Council, 988 So. 2d 574 (Ala. Civ. App. 2008). · cites it 2× “§ 22-21-263(a), Ala.Code 1975. Construing § 41-22-10 liberally to effectuate the AAPA's purposes, the Authority had standing to seek declaratory and injunctive relief.”
Daniel Senior Living of Inverness I, LLC v. STV One Nineteen Senior Living, LLC, 161 So. 3d 196 (Ala. 2014). · cites it 4× “Ala.Code 1975, §§ 22-21-263(a), -265(a), and -267; Health Care Auth.”
Sacred Heart Health Sys., Inc. v. Infirmary Health Sys., 155 So. 3d 989 (Ala. Civ. App. 2013). · cites it 7× ““In addition, § 22-21-263(a)(2) provides that new institutional health services for which a CON must be obtained include new annual operating expenses by or on behalf of a health care facility in the amount of $800,000 adjusted annually for inflation.”
Affinity Hosp., LLC v. Brookwood Health Servs. Inc., 143 So. 3d 208 (Ala. Civ. App. 2013). · cites it 2× “” § 22-21-263(a), Ala.Code 1975. “The SHPDA, pursuant to the provisions of Section 22-21-274, shall prescribe by rules and regulations the criteria and clarifying definitions for reviews covered by this article.”
Infirmary Health Sys. v. Sacred Heart Health Sys., Inc., 155 So. 3d 980 (Ala. 2012). · cites it 3× “” Section 22-21-263, Ala.Code 1975, prohibits institutional health services that are inconsistent with the “State Health Plan”: 3 “(a) All new institutional health services which are subject to this article and which are proposed to be offered or developed within the state shall…”
Springhill Hosps., Inc. v. State Health Plan. & Dev. Agency, 253 So. 3d 955 (Ala. Civ. App. 2017). · cites it 25× “Code 1975, a part of Title 22, Chapter 22, Article 9 ("Article 9") of the Alabama Code 1975 (pertaining to the "Control and Regulation of Development of Certain Health Care Facilities"), Surgicare's proposed expansion of its ambulatory surgery center ("ASC") meets the definition…”
Sacred Heart Health Sys., Inc. v. Infirmary Health Sys., 155 So. 3d 969 (Ala. Civ. App. 2010). · cites it 5× “” Section 22-21-263 provides: “(a) All new institutional health services which are subject to this article and which are proposed to be offered or developed within the state shall be subject to review under this article.”
Show all 20 citing cases →
— Ala. Code § 22-21-263(a) — 10 cases
Pleasure Island Ambulatory Surgery Ctr., LLC v. State Health Plan. & Dev. Agency, 38 So. 3d 739 (Ala. Civ. App. 2008). “Accordingly, the intended relocation of the facility is “construction” under § 22-21-263(a), thus requiring Infirmary Health to undergo a CON review, and obtain a new CON, in order to relocate the facility.”
HEALTH CARE AUTH. OF ATHENS v. Statewide Health Coordinating Council, 988 So. 2d 574 (Ala. Civ. App. 2008). “§ 22-21-263(a), Ala.Code 1975. Construing § 41-22-10 liberally to effectuate the AAPA's purposes, the Authority had standing to seek declaratory and injunctive relief.”
HealthSouth of Alabama, LLC v. Shelby Ridge Acquisition Corp., 207 So. 3d 14 (Ala. Civ. App. 2015). “” § 22-21-263, Aa.Code 1975. B. Appeal No. 2130628: Submission of HealthSouth’s CON Application to Relocate the Carraway Beds On July 29, 2009, SHPDA approved HealthSouth’s acquisition of the Carraway beds.”
Affinity Hosp., LLC v. Brookwood Health Servs. Inc., 143 So. 3d 208 (Ala. Civ. App. 2013). “” § 22-21-263(a), Ala.Code 1975. “The SHPDA, pursuant to the provisions of Section 22-21-274, shall prescribe by rules and regulations the criteria and clarifying definitions for reviews covered by this article.”
Springhill Hospitals, Inc. v. State Health Plan. & Dev. Agency, 224 So. 3d 670 (Ala. Civ. App. 2016). “Code 1975, thereby qualifying the ASC expansion as a “new institutional health service” for which Surgicare would be required to submit an application for a certificate of need (“CON application”) that would be subject to review by the CONRB.”
— Ala. Code § 22-21-263(a)(1) — 2 cases
Prime Lithotripter Oper. v. Lithomedtech of Alabama, LLC, 855 So. 2d 1085 (Ala. Civ. App. 2001). “Code 1975, absent implication of the criteria set forth in § 22-21-263; it also sought a declaration that CON Rule 410-1-4-.”
Sacred Heart Health Sys., Inc. v. Infirmary Health Sys., 155 So. 3d 969 (Ala. Civ. App. 2010). “” Section 22-21-263 provides: “(a) All new institutional health services which are subject to this article and which are proposed to be offered or developed within the state shall be subject to review under this article.”
— Ala. Code § 22-21-263(a)(2) — 8 cases
Springhill Hospitals, Inc. v. State Health Plan. & Dev. Agency, 224 So. 3d 670 (Ala. Civ. App. 2016). “Code 1975, thereby qualifying the ASC expansion as a “new institutional health service” for which Surgicare would be required to submit an application for a certificate of need (“CON application”) that would be subject to review by the CONRB.”
Sacred Heart Health Sys., Inc. v. Infirmary Health Sys., 155 So. 3d 989 (Ala. Civ. App. 2013). ““In addition, § 22-21-263(a)(2) provides that new institutional health services for which a CON must be obtained include new annual operating expenses by or on behalf of a health care facility in the amount of $800,000 adjusted annually for inflation.”
Prime Lithotripter Oper. v. Lithomedtech of Alabama, LLC, 855 So. 2d 1085 (Ala. Civ. App. 2001). “Code 1975, absent implication of the criteria set forth in § 22-21-263; it also sought a declaration that CON Rule 410-1-4-.”
Springhill Hosps., Inc. v. State Health Plan. & Dev. Agency, 253 So. 3d 955 (Ala. Civ. App. 2017). “Code 1975, a part of Title 22, Chapter 22, Article 9 ("Article 9") of the Alabama Code 1975 (pertaining to the "Control and Regulation of Development of Certain Health Care Facilities"), Surgicare's proposed expansion of its ambulatory surgery center ("ASC") meets the definition…”
Charter Southland Hosp., Inc. v. Hosp. Corp., 480 So. 2d 591 (Ala. Civ. App. 1985).
— Ala. Code § 22-21-263(a)(3) — 3 cases
Daniel Senior Living of Inverness I, LLC v. STV One Nineteen Senior Living, LLC, 161 So. 3d 196 (Ala. 2014). “Ala.Code 1975, §§ 22-21-263(a), -265(a), and -267; Health Care Auth.”
Med. Ctr. East, Inc. v. Jefferson Tuberculosis Sanatorium, 565 So. 2d 64 (Ala. 1990).
Ex parte STV One Nineteen Senior Living, LLC, d/b/a Somerby at St. Vincent's One Nineteen. (Ala. 2014).
— Ala. Code § 22-21-263(a)(4) — 3 cases
Prime Lithotripter Oper. v. Lithomedtech of Alabama, LLC, 855 So. 2d 1085 (Ala. Civ. App. 2001). “Code 1975, absent implication of the criteria set forth in § 22-21-263; it also sought a declaration that CON Rule 410-1-4-.”
Charter Southland Hosp., Inc. v. Hosp. Corp., 480 So. 2d 591 (Ala. Civ. App. 1985).
Alabama Renal Stone Inst., Inc. v. State Health Plan. Agency, 594 So. 2d 110 (Ala. 1992).
— Ala. Code § 22-21-263(a)(l) — 2 cases
Sacred Heart Health Sys., Inc. v. Infirmary Health Sys., 155 So. 3d 989 (Ala. Civ. App. 2013). ““In addition, § 22-21-263(a)(2) provides that new institutional health services for which a CON must be obtained include new annual operating expenses by or on behalf of a health care facility in the amount of $800,000 adjusted annually for inflation.”
Sacred Heart Health Sys., Inc. v. Infirmary Health Sys., 155 So. 3d 969 (Ala. Civ. App. 2010). “” Section 22-21-263 provides: “(a) All new institutional health services which are subject to this article and which are proposed to be offered or developed within the state shall be subject to review under this article.”
— Ala. Code § 22-21-263(b) — 1 case
Charter Southland Hosp., Inc. v. Hosp. Corp., 480 So. 2d 591 (Ala. Civ. App. 1985).
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