Kentucky
Kentucky's CON laws have been in place since 1972. They regulate 18 different services, devices, and procedures. Three hospital systems control 100% of the Louisville inpatient market. Competition is not just difficult here. It is illegal.
What CON Covers in Kentucky
Kentucky's CON program is administered by the Office of the Inspector General (OIG) within the Cabinet for Health and Family Services. Incumbent providers can intervene in the formal review process to block a new competitor's entry into the market.
| Category | Services Requiring CON Approval |
|---|---|
| Facilities | Hospitals, Ambulatory Surgical Centers (ASCs), Long-term care facilities, Psychiatric residential treatment facilities, Home health agencies, Hospices |
| Services | Chemical dependency treatment programs, Open heart surgery programs, Organ transplant programs, Special care neonatal beds |
| Equipment | Freestanding or mobile technology (MRI, PET, CT scanners) |
| Other | Ambulance services (with some exceptions), Prescribed pediatric extended care facilities |
The Application Process
The process is bifurcated into two tracks. The Formal Review is the most common and complex path. The applicant bears the burden of proving the proposed service is necessary, and a decision is typically rendered six months after the application date. This process resembles a trial, where incumbent providers can intervene to block a new competitor's entry.
| Review Detail | Value |
|---|---|
| Reviewing Agency | Office of the Inspector General (OIG), Cabinet for Health and Family Services |
| Decision Authority | Cabinet Hearing Officer |
| Formal Review Timeline | ~6 months |
| Can Competitors Intervene? | Yes. Incumbents can block new entrants. |
| Counties Allowing New Home Health Agencies | 8 of 120 |
Who Benefits
Kentucky's restrictive CON laws have fostered a healthcare landscape dominated by a few large hospital systems. The Louisville hospital market is a prime example of extreme consolidation.
An HHI above 2,500 is considered "highly concentrated" by federal antitrust agencies.
Source: Kentuckiana Health Collaborative, 2023
Also classified as highly concentrated. Kentucky's two largest markets are both monopolized.
Source: Kentuckiana Health Collaborative, 2023
Prices at Kentucky facilities range from 107% to a staggering 354% of what Medicare would have paid.
Source: Kentuckiana Health Collaborative, 2023
Of Kentucky hospitals received a 1- or 2-star CMS quality rating. Only 6% achieved 5 stars (vs. 14% nationally).
Source: CMS, 2022
Louisville Inpatient Market Share
Three systems control 100% of the inpatient hospital market in Louisville. Norton Healthcare's 55% share gives it a commanding position.
Hospital mergers have been found to increase the average hospital price by 6-18% nationwide. Kentucky's experience aligns with this trend, as the state's CON laws protect incumbent systems from new entrants that could offer more competitive pricing.
— Kentuckiana Health Collaborative, "Unbridled Costs," 2023
The Human Cost
Behind every CON denial is a real person who was told by the government that their community does not 'need' the care they wanted to provide.
Tiwari v. Meier (Tiwari v. Friedlander)
Filed December 2019 · Louisville, Kentucky · Institute for Justice
Dipendra Tiwari, a Nepali immigrant, wanted to open Grace Home Care, a home health care agency catering to refugees in Louisville, offering services in the Nepali language. Thousands of Nepali speakers from Bhutan had resettled in Louisville.
He paid a $1,000 fee to submit his plan to the state. A $2 billion health care conglomerate, his future competitor, argued there was no need for another home health agency. Kentucky refused to issue a certificate of need and rejected his application.
In Kentucky's 120 counties, new home health agencies are allowed in only 8 counties. Louisville itself has only 9 home health agencies for 22,000 patients.
The case received unfavorable decisions at both the district court and the Sixth Circuit Court of Appeals (February 2022). The U.S. Supreme Court declined to hear the case in November 2022.
Everyone has the right to earn an honest living free from irrational laws. Letting giant health care conglomerates keep entrepreneurs out of business has nothing to do with protecting the public. It protects entrenched corporations.
— Institute for Justice, Tiwari v. Meier brief
Reform Status
Kentucky has not reformed its CON laws. The federal mandate that originally encouraged CON adoption was repealed in 1987. Kentucky held on.
Kentucky (No Reform)
- CON program in place since 1972
- 18 services regulated
- Score: 100/100 (most restrictive)
- No reform legislation pending
- Louisville HHI: 3,720
- 40%+ hospitals rated 1-2 stars
States That Reformed
- Florida (2019): Repealed most CON requirements
- Indiana (1999): Repealed entire CON program
- Ohio (2012): Repealed most CON laws
- South Carolina (2023): Full repeal, hospital CON sunsets 2027
- ASCs per capita increased 44-47% after repeal
- Hospital charges 5.5% lower five years after repeal
The Evidence Against CON
| Metric | Finding | Source |
|---|---|---|
| Hospital charges after repeal | 5.5% lower after 5 years | Research literature |
| ASCs per capita after repeal | +44-47% statewide, +92-112% in rural areas | Research literature |
| OH coronary artery bypass costs | -2.8% after CON repeal | State data |
| PA coronary artery bypass costs | -8.8% after CON repeal | State data |
| Medicaid spending after repeal | No significant growth | Research literature |
| FTC/DOJ position | CON laws lead to higher, not lower, costs | FTC/DOJ Joint Report |
The Rojas Report Take
Kentucky's CON laws do not control costs. They do not improve quality. They do not expand access. What they do is grant a government-backed monopoly to three hospital systems in Louisville that control 100% of the inpatient market and charge up to 354% of Medicare rates for the privilege.
When Dipendra Tiwari, a Nepali immigrant, tried to open a home health agency to serve refugees in their own language, a $2 billion conglomerate told the state there was 'no need.' The state agreed. In a city of 22,000 home health patients served by just 9 agencies. In a state where 112 of 120 counties are closed to new home health providers by law.
This is not regulation. This is a protection racket with a government seal on it. The federal government repealed the CON mandate in 1987 because it did not work. Kentucky kept it anyway.
The question is not whether CON laws should be reformed. The question is who is paying to keep them in place.
Related Content
The National CON Investigation
How a 1959 study was twisted into a federal mandate that created healthcare monopolies in 35 jurisdictions. The full origin story and 50-state rankings.
Virginia: The Healthcare Cartel
Sentara's $4.79B empire and the 17 services you cannot offer without government permission.
InvestigationTiwari v. Meier: Full Case Analysis
How a $2 billion conglomerate used CON laws to block a Nepali immigrant from serving refugees.
InvestigationData sourced from Cicero Institute, National Academy for State Health Policy (NASHP), Kentuckiana Health Collaborative, Centers for Medicare & Medicaid Services (CMS), Institute for Justice, Federal Trade Commission, and Department of Justice.