Small‑Town Advantage: Leveraging Michigan’s Certificate‑of‑Need Flexibilities

Michigan’s Certificate of Need (CON) regulations offer tailored provisions that reflect the operational realities of rural and micropolitan markets. Lower volume thresholds, wider relocation limits, and expanded planning‑area definitions let community hospitals and clinics plan new services or modernize facilities with greater flexibility. When governing boards consider an Operation Room (OR) build‑out, imaging upgrade, or replacement hospital, these rural allowances strengthen both the regulatory case and the project’s financial profile. The following is a guide to the advantages that rural applicants can leverage when applying for a CON in Michigan.

1. Hospital and Bed Capacity Requirements

 A 25‑bed critical‑access hospital (CAH) requires far less capital and staff than a 200‑bed facility. When you replace an aging plant or consolidate low‑volume campuses, position the project around community access and financial sustainability—especially if you plan to seek Rural Emergency Hospital (REH) or CAH status.

2. Operating Room Volume and Relocation Parameters

• To add ORs at facilities with fewer than six ORs: average 979 adjusted cases per OR over a year (metro threshold 1,128).
• To relocate existing ORs up to 20 miles from the current campus—double the metro limit.

Tip: Use visiting‑specialist rotations and referral agreements to hit the lower rural‑case threshold, then model future growth tied to improved local access.

3. Cardiac Catheterization and Open‑Heart Surgery Criteria

Tip: A 10‑mile radius often covers several townships, allowing you to redevelop on a more accessible highway parcel while keeping historical volume credit.

4. Imaging Services: CT and MRI Planning‑Area Standards

Rural or micropolitan applicants measure need across a 75‑mile radius (metro areas use 20 miles). That ten‑fold expansion usually turns marginal numbers into clear evidence of unmet need.

MRI thresholds for rural providers include:

• Initiate a fixed MRI with 10,000 emergency‑department visits per year (metro threshold 20,000).
• Host a mobile MRI by demonstrating only 400 adjusted procedures in year two (metro requirement 600).

5. Megavoltage Radiation Therapy (MRT) Initiation Criteria

To place the first MRT unit in a planning area, rural providers must show 5,500 equivalent treatment visits—31 percent below the metro bar of 8,000—and select a site at least 60 driving miles from the nearest MRT service. Many northern Michigan patients currently travel two hours for daily radiation; the 60‑mile rule converts that hardship into regulatory leverage.

6. PET Scanner Conversion and Siting Standards

Convert a rural mobile‑to‑fixed PET by documenting 1,325 scans in the last 12 months and locating the fixed unit within 25 miles of the mobile host (metro projects need 1,500 scans and must stay within 10 miles).

7. NICU and Long‑Term Care Relocation Provisions

• Level III NICU start‑ups: qualify with 600 live births per year if the hospital lies more than 100 miles from the nearest NICU (metro threshold 2,000 births, no distance clause).
• Nursing‑home (HLTCU) bed relocations: move beds anywhere within the county planning area; metro moves remain capped at three miles.

8. Other Provider Types

Bone‑marrow transplant, solid‑organ transplant, lithotripsy: the standards apply uniformly statewide—rural status confers no advantage.

Conclusion: Leveraging Rural Flexibilities

Michigan’s rural‑specific CON thresholds empower hospitals and other provider types to modernize facilities, add service lines, and improve patient access without the capital burden metropolitan standards impose. By aligning projects with lower bed counts, right‑sized operating‑room volumes, and expanded imaging catchment areas, rural providers can present applications that meet both regulatory criteria and community‑health goals.

How Mooradian Law Can Help

Mooradian Law represents hospitals and health systems, physician groups, ambulatory surgery centers, diagnostic imaging operators, dialysis and infusion centers, post‑acute and long‑term care facilities, behavioral‑health providers, and other health‑care organizations throughout the Michigan CON lifecycle. Our services include:

• Feasibility and threshold analysis. We benchmark projected volumes, catchment‑area data, and financial models against the relevant CON standards to confirm viability before you invest capital.
• Strategic planning and structuring. We design joint ventures, management agreements, real‑estate transactions, and financing arrangements that align with CON and federal fraud‑and‑abuse rules.
• Application management. Our team prepares Letters of Intent, full applications and supporting exhibits; coordinates with MDHHS staff; and represents clients before the Michigan Department of Health and Human Services’ CON Section.
• Post‑approval compliance. We assist and advise on compliance matters, ownership transfers, relocations, and replacements to safeguard CON status over the long term.

To discuss how these services can advance your next project, contact Mooradian Law at info@mooradian.law or (734) 219‑4890.

About the Authors

Serj Mooradian is a healthcare attorney and founder of Mooradian Law. With more than a decade of experience at top national firms, Serj advises healthcare clients on regulatory strategy and transactions involving Stark Law, Anti-Kickback Statute, HIPAA, and CON compliance.

Hannah Zaskiewicz is a healthcare attorney with a focus on healthcare regulatory and transactional matters. She is widely recognized as one of Michigan’s top Certificate of Need advisors, helping providers navigate the application process with strategic insight and exceptional client service.

Seyed Mirabedini leads the firm’s digital strategy. He translates complex regulatory topics into digestible content to help clients make informed, strategic decisions.