Mississippi Small Community Hospital Pilot Program Delivers CON Flexibility

Mississippi hospitals and other health care providers need to obtain a Certificate of Need (CON) before establishing new facilities or offering new services. The CON process can often be a lengthy and expensive undertaking.  If a competitor challenges a project, the CON hearing and appeals process can often drag on for years.  However, a new law provides hospitals in small communities with a streamlined process to obtain an exemption for projects, which would otherwise require CON review.  

On March 23, Governor Tate Reeves signed H.B. 1622, which established the Small Community Hospital Pilot Program, into law.  Under the pilot program, qualifying facilities may obtain one (or possibly more) exemptions for a project that would otherwise require obtaining a certificate of need.

Who Qualifies for the Small Community Hospital Pilot Program?

A qualifying “hospital in a small community” is defined as a hospital that is located:

• In a county that does not contain a municipality whose population exceeds 15,000 as of the 2020 census or
• Within the region designated by the Mississippi State Department of Health as the Delta Public Health Region as of January 1, 2026.

How Does the Exemption Process Work? 

Each qualifying hospital may receive one exemption—or in the case of a hospital located in the Delta Public Health Region, two exemptions—for an activity that would otherwise require CON review. 

The exemption may not be used for:

• A service for which there is a general CON moratorium or
• Projects that would place a licensed hospital within 35 miles of another hospital or would otherwise jeopardize a licensed hospital’s critical access status. 

And the exemption shall be limited to the main building of the qualifying hospital or a 5-mile radius around the main building of the qualifying hospital. 

The law also provides that qualifying hospitals may obtain exemptions to establish geriatric psychiatric units without obtaining a CON, and this exemption will not count against the hospital’s exemption limit, thus giving hospitals with more flexibility to offer inpatient psychiatric services for elderly patients.

Use It or Lose It

This program offers small community hospitals a unique opportunity to expand services and facilities without having to undergo the CON process. 

Keep in mind, exemptions must be requested from the Department of Health by June 30, 2027, or the opportunity to obtain an exemption will expire. 

For more information about applying for an exemption, or any other CON related matters, please contact Blake Adams or another member of the Phelps health care team.