NC General Statutes

N.C. Gen. Stat. § 131E-178 (2026)

Activities requiring certificate of need

✓ current as of July 2026

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(a) No person shall offer or develop a new institutional health service without first obtaining a certificate of need from the Department; provided, however, no person who provides gastrointestinal endoscopy procedures in one or more gastrointestinal endoscopy rooms located in a nonlicensed setting, shall be required to obtain a certificate of need to license that setting as an ambulatory surgical facility with the existing number of gastrointestinal endoscopy rooms, provided that:

(1) The license application is postmarked for delivery to the Division of Health Service Regulation by December 31, 2006;

(2) The applicant verifies, by affidavit submitted to the Division of Health Service Regulation within 60 days of the effective date of this act, that the facility is in operation as of the effective date of this act or that the completed application for the building permit for the facility was submitted by the effective date of this act;

(3) The facility has been accredited by The Accreditation Association for Ambulatory Health Care, The Joint Commission on Accreditation of Healthcare Organizations, or The American Association for Accreditation of Ambulatory Surgical Facilities by the time the license application is postmarked for delivery to the Division of Health Service Regulation of the Department; and

(4) The license application includes a commitment and plan for serving indigent and medically underserved populations.

All other persons proposing to obtain a license to establish an ambulatory surgical facility for the provision of gastrointestinal endoscopy procedures shall be required to obtain a certificate of need. The annual State Medical Facilities Plan shall not include policies or need determinations that limit the number of gastrointestinal endoscopy rooms that may be approved.

(b) No person shall make an acquisition by donation, lease, transfer, or comparable arrangement without first obtaining a certificate of need from the Department, if the acquisition would have been a new institutional health service if it had been made by purchase. In determining whether an acquisition would have been a new institutional health service, the capital expenditure for the asset shall be deemed to be the fair market value of the asset or the cost of the asset, whichever is greater.

(c) No person shall incur an obligation for a capital expenditure which is a new institutional health service without first obtaining a certificate of need from the Department. An obligation for a capital expenditure is incurred when:

(1) An enforceable contract, excepting contracts which are expressly contingent upon issuance of a certificate of need, is entered into by a person for the construction, acquisition, lease or financing of a capital asset;

(2) A person takes formal action to commit funds for a construction project undertaken as his own contractor; or

(3) In the case of donated property, the date on which the gift is completed.

(d) Where the estimated cost of a proposed capital expenditure, including the fair market value of equipment acquired by purchase, lease, transfer, or other comparable arrangement, is certified by a licensed architect or engineer to be equal to or less than the expenditure minimum for capital expenditure for new institutional health services, such expenditure shall be deemed not to exceed the amount for new institutional health services regardless of the actual amount expended, provided that the following conditions are met:

(1) The certified estimated cost is prepared in writing 60 days or more before the obligation for the capital expenditure is incurred. Certified cost estimates shall be available for inspection at the facility and sent to the Department upon its request.

(2) The facility on whose behalf the expenditure was made notifies the Department in writing within 30 days of the date on which such expenditure is made if the expenditure exceeds the expenditure minimum for capital expenditures. The notice shall include a copy of the certified cost estimate.

(e) The Department may grant certificates of need which permit capital expenditures only for predevelopment activities. Predevelopment activities include the preparation of architectural designs, plans, working drawings, or specifications, the preparation of studies and surveys, and the acquisition of a potential site. (1977, 2nd Sess., c. 1182, s. 2; 1979, c. 876, s. 2; 1981, c. 651, s. 3; 1983, c. 775, s. 1; 1983 (Reg. Sess., 1984), c. 1110, s. 3; 1985, c. 740, s. 3; 1985 (Reg. Sess., 1986), c. 1001, s. 1; 1987, c. 511, s. 1; c. 768; 1991, c. 692, s. 3; 1993, c. 7, s. 4; 2005-346, s. 7; 2007-182, s. 1.)

Notes of Decisions

Cited in 28 cases (4 in the last 5 years), 1990–2022 · leading case: Med-Trans Corp. v. Benton, 581 F. Supp. 2d 721 (E.D.N.C. 2008).

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Med-Trans Corp. v. Benton, 581 F. Supp. 2d 721 (E.D.N.C. 2008). · cites it 5× “The law implements these and other purposes through careful scrutiny of a prospective health service provider’s CON application, which must document, among other things, “the population to be served”, “that the least costly or most effective alternative has been proposed”, and…”

Hospice at Greensboro, Inc. v. North Carolina Dep't of Health & Human Servs. of Facility Servs., 647 S.E.2d 651 (N.C. Ct. App. 2007). · cites it 6× “New Institutional Health Service N.C. Gen. Stat. § 131E-178 provides that “No person shall offer or develop a new institutional health service without first obtaining a certificate of need” from DHHS.”

Cumberland Cnty. Hosp. Sys., Inc. v. N.C. Dep't of Health & Human Servs., 776 S.E.2d 329 (N.C. Ct. App. 2015). · cites it 4× “New Institutional Health Service First, Petitioners claim that the changes proposed in FirstHealth's No Review Request amounted to a "new institutional health service," requiring a new CON pursuant to N.C. Gen.Stat. § 131E-178(a). Specifically, Petitioners allege that the…”

Good Hope Health Sys., L.L.C. v. N.C. Dep't of Health & Human Servs., 659 S.E.2d 456 (N.C. Ct. App. 2008). · cites it 4× “" See N.C. Gen.Stat. § 131E-178 (2003) ("No person shall offer or develop a new institutional health service without first obtaining a[CON].”

Hope-A Women's Cancer Ctr., P.A. v. North Carolina Dep't of Health & Human Servs., 691 S.E.2d 421 (N.C. Ct. App. 2010). · cites it 6× “The General Assembly has set forth the activities requiring a CON in N.C. Gen. Stat. § 131E-178 as follows, in pertinent part: (a) No person shall offer or develop a new institutional health service without first obtaining a certificate of need from the Department.”

Parkway Urology, P.A. v. North Carolina Dep't of Health & Human Servs., 696 S.E.2d 187 (N.C. Ct. App. 2010). · cites it 2× “]” N.C. Gen. Stat. § 131E-178 (2009). “New institutional health services” means any of the following: fl.”

Cape Fear Mem'l Hosp. v. North Carolina Dep't of Human Resources, 466 S.E.2d 299 (N.C. Ct. App. 1996). · cites it 6× “” N.C. Gen. Stat. § 131E-178(a) (1994). A “new institutional health service” is defined to include, among other things, “[t]he acquisition by purchase of .”

Surgical Care Affiliates, LLC v. N.C. Dep't of Health & Human Servs., 762 S.E.2d 468 (N.C. Ct. App. 2014). · cites it 2× “” N.C. Gen. Stat. § 131E-175(4). As a consequence, a CON is required for the development of an additional institutional health service, including the use and implementation of an operating room.”

Mooresville Hosp. Mgmt. Assocs., Inc. v. North Carolina Dep't of Health & Human Servs., 611 S.E.2d 431 (N.C. Ct. App. 2005). · cites it 4× “N.C. Gen.Stat. § 131E-178, 182 (2003). DHHS then reviews the application for a period normally not to exceed ninety days to determine whether a CON for the proposed project should issue.”

Caromont Health, Inc. v. North Carolina Dep't of Health, 751 S.E.2d 244 (N.C. Ct. App. 2013). · cites it 2× “” N.C. Gen. Stat. § 131E-178(a)(4) (2011). In addition, a physician may open a gastrointestinal (“GI”) endoscopy room in his or her office at any time without a CON or a license.”

Total Renal Care of North Carolina LLC v. North Carolina Dep't of Health, 673 S.E.2d 137 (N.C. Ct. App. 2009). · cites it 2× “” N.C. Gen. Stat. § 131E-176(3). Health *380 care facilities to which the CON Law applies include: hospitals; long-term care hospitals; psychiatric facilities; rehabilitation facilities; nursing home facilities; adult care homes; kidney disease treatment centers, including…”

Abram v. Charter Med. Corp. of Raleigh, Inc., 398 S.E.2d 331 (N.C. Ct. App. 1990). · cites it 2× “N.C. Gen. Stat. § 131E-178(a) (1988). In 1982, ACE and Charter, along with several other organizations, submitted applications for a CON to provide chemical dependency treatment facilities in the Wake County area.”

Show all 28 citing cases →

— N.C. Gen. Stat. § 131E-178(a) — 21 cases

Med-Trans Corp. v. Benton, 581 F. Supp. 2d 721 (E.D.N.C. 2008). “The law implements these and other purposes through careful scrutiny of a prospective health service provider’s CON application, which must document, among other things, “the population to be served”, “that the least costly or most effective alternative has been proposed”, and…”

Hospice at Greensboro, Inc. v. North Carolina Dep't of Health & Human Servs. of Facility Servs., 647 S.E.2d 651 (N.C. Ct. App. 2007). “New Institutional Health Service N.C. Gen. Stat. § 131E-178 provides that “No person shall offer or develop a new institutional health service without first obtaining a certificate of need” from DHHS.”

Cumberland Cnty. Hosp. Sys., Inc. v. N.C. Dep't of Health & Human Servs., 776 S.E.2d 329 (N.C. Ct. App. 2015). “New Institutional Health Service First, Petitioners claim that the changes proposed in FirstHealth's No Review Request amounted to a "new institutional health service," requiring a new CON pursuant to N.C. Gen.Stat. § 131E-178(a). Specifically, Petitioners allege that the…”

Cape Fear Mem'l Hosp. v. North Carolina Dep't of Human Resources, 466 S.E.2d 299 (N.C. Ct. App. 1996). “” N.C. Gen. Stat. § 131E-178(a) (1994). A “new institutional health service” is defined to include, among other things, “[t]he acquisition by purchase of .”

Surgical Care Affiliates, LLC v. N.C. Dep't of Health & Human Servs., 762 S.E.2d 468 (N.C. Ct. App. 2014). “” N.C. Gen. Stat. § 131E-175(4). As a consequence, a CON is required for the development of an additional institutional health service, including the use and implementation of an operating room.”

— N.C. Gen. Stat. § 131E-178(a)(4) — 1 case

Caromont Health, Inc. v. North Carolina Dep't of Health, 751 S.E.2d 244 (N.C. Ct. App. 2013). “” N.C. Gen. Stat. § 131E-178(a)(4) (2011). In addition, a physician may open a gastrointestinal (“GI”) endoscopy room in his or her office at any time without a CON or a license.”

— N.C. Gen. Stat. § 131E-178(b) — 1 case

Mission Hospitals, Inc. v. North Carolina Dep't of Health & Human Servs., 696 S.E.2d 163 (N.C. Ct. App. 2010).

— N.C. Gen. Stat. § 131E-178(d) — 1 case

Mission Hospitals, Inc. v. North Carolina Dep't of Health & Human Servs., 696 S.E.2d 163 (N.C. Ct. App. 2010).

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