Regulators are making meaningful changes to Certificate of Need (CON) programs across the country to strengthen the oversight of material expansions in the healthcare market while reducing unnecessary regulatory friction. Thus far, many of the changes have been related to capital expenditures, bed limits, and service-line exemptions that pertain to material expansions in the health care market, but greater equity concerns have been emerging. While regulators have always considered the necessity for an expansion in a given service area, there is now an increasing focus on whether these expansions will mitigate health disparities in the desired service areas. These changes are designed to enhance health equity and assist medically underserved groups in getting access to vital care.
As the first blog post in Sheppard’s Meaningful Changes in the Certificate of Need (CON) Landscape blog series, this article highlights:
- Why health equity impact assessment (HEIA) requirements matter in practice; and
- What changes to HEIA requirements signal for the future.
Health equity has long been a part of policy language, but states are increasingly incorporating equity considerations into their regulatory processes, including the CON process. New York’s adoption of an HEIA requirement for many CON applications is illustrative. Many other states are exploring similar reforms, whether as formal assessments or content that effectively requires the same equity-focused analysis.
As adopted in New York, the HEIA is a structured assessment that must be prepared by an independent entity, with “meaningful engagement” from public health experts, stakeholders, community leaders, and residents.[1] The HEIA template breaks the assessment into four substantive parts:
- Scoping: Information on the project’s service area. This includes demographic information and a specific identification of which medically underserved groups in the service area will be impacted by the proposed project. The HEIA must also identify unique health needs and summarize the availability of similar care nearby.
- Potential Impacts: Information on how the project will improve access to services and care and reduce health disparities. This section asks for information on transportation for individuals currently receiving care that will be impacted, architectural barriers in the facility, and access to reproductive services and maternal healthcare.
- Mitigation: Information on how the project will improve health equity and decrease disparities. This includes how the facility’s services will be communicated to the community and whether changes can be made to the project to meet the needs of the medically underserved groups in the service area.
- Monitoring: Information on how the applicant will track health equity impacts.
The HEIA requirement is not only about information-gathering, but also requires applicants to engage with the communities they serve, synthesize vast amounts of information, and critically assess how their projects will affect unique needs in a particular area. HEIAs increasingly call for specificity around mitigation and follow-through. That may include operational commitments such as expanded interpreter services, patient navigation, extended hours, transportation partnerships, community outreach, revised referral pathways, or service continuity plans during relocations or consolidations. Even when not framed as binding “conditions,” these commitments can become the expectations by which regulators measure compliance and good faith. This shift elevates the importance of internal alignment early in the process. A credible HEIA typically requires coordination across compliance, clinical operations, community relations, and finance to ensure that proposed actions are feasible and funded.
From a transaction perspective, HEIAs add a new layer of regulatory and reputational diligence. If a deal requires CON approval – or if the post-closing business plan anticipates changes that will trigger CON requirements – the HEIA should be treated as a core part of the process, not just a list item to be checked off at the end. Where regulators or community stakeholders focus on service preservation or access expansion, approvals may come with practical expectations around maintaining service lines, investing in access features, or tracking and reporting outcomes. Those expectations can materially affect the economics of a deal and should be reflected in integration planning, budgeting, and allocation of responsibility for pre- and post-closing commitments. A transaction that appears straightforward can quickly become more complex depending on the results of the HEIA, and building an HEIA will affect timelines because of the need for additional coordination, stronger data collection, and more robust stakeholder outreach.
While New York has been the leader in incorporating HEIA requirements into its CON program, multiple other states are exploring health equity-oriented requirements in their regulatory approval frameworks. These are not always presented as assessments. Some require new content in an application that functionally resembles an HEIA, while others have shown more attention to community access and impact in broader oversight frameworks. For example, in 2025, North Carolina implemented a policy that requires CON applicants who wish to offer a new institutional health service to demonstrate how the project will provide culturally competent care to reduce health disparities in underserved communities.[2] As a result, the state’s CON application now requires identification of the underserved communities, the groups’ unmet needs, and how the applicant’s strategies will specifically aid in disparity reduction.
Additionally, other states consider health equity concerns in their approval processes on a more informal basis. For example, Connecticut recently approved an emergency CON application for a hospital acquisition, but imposed conditions on the transfer of ownership on the basis of HEIA-related concerns.[3] Those concerns include community engagement, maintenance of services, and prevention of gaps in access.[4]
Health equity analyses are becoming a standard expectation in healthcare regulatory reviews. Organizations planning multi-state strategies where CONs are involved should anticipate the need to clearly identify affected populations and explicit mitigation and accountability commitments. Planning for these changes early can lessen regulatory friction and transactional hurdles as states continue to implement reforms.
FOOTNOTES
[1] N.Y. Pub. Health Law § 2802-b(4).
[2] North Carolina Department of Health & Human Services, Division of Health Service Regulation, State Health Coordinating Council: General Policy GEN-5 (2024), https://info.ncdhhs.gov/dhsr/mfp/pdf/2024/shcc/03_GEN-5_v2_final.pdf.
[3] Conn. Off. of Health Strategy, Final Decision, Emergency Certificate of Need Application of Hartford HealthCare Corp. & Manchester Mem’l Hosp., Inc., Docket No. 25-32843-ECON (2025), https://portal.ct.gov/ohs/-/media/ohs/certificate-of-need/hhc-echn-e-con-decision-final.pdf
[4] Conn. Off. of Health Strategy, Office of Health Strategy Approves Hartford HealthCare Acquisition of Eastern Connecticut Hospital (Dec. 10, 2025), https://portal.ct.gov/ohs/press-room/press-releases/2025-press-releases/office-of-health-strategy-approves-hartford-healthcare-acquisition-of-eastern-connecticut-hospital.