New Jersey Certificate of Need Laws
New Jersey
Most Restrictive
Year Enacted
1971
Services Regulated
—
National Rank
43 of 51
Top Systems
- RWJBarnabas Health$7.5B
- Hackensack Meridian Health
Dominant Insurer
Two hospital systems dominate the state, and one insurer controls 71% of the market.
Reform Status
States That Reformed
Key Case
No major case law on record.
Services Requiring CON Approval
5 Services Held Hostage
- ✓Hospitals
- ✓Ambulatory Surgery Centers (ASCs)
- ✓Nursing Homes / Long-Term Care
- ✓Psychiatric Facilities
- ✓Imaging (MRI, CT, PET)
The Permission Process
The case demonstrates the immense power of the state agency within the CON process. Even after a project has been deemed necessary and approved, it can be blocked years later, leaving community health needs unmet and illustrating how CON can stifle the development of essential services.
The 1998 reform created exemptions for certain services like ambulatory surgery and PET scans, but it preserved the CON requirement for new hospitals, specialized services, and long-term care, protecting the most lucrative revenue streams for incumbent systems.
RWJBarnabas Health. $7.5B. Insurer Dominance.
Insurer Dominance
- Held by the state's largest insurer, Horizon BCBSNJ.
- Two hospital systems dominate the state, and one insurer controls 71% of the market.
- Learn about the history and impact of Certificate of Need laws across the United States.
Of the top two hospital systems, RWJBarnabas and Hackensack Meridian.
Two hospital systems dominate the state, and one insurer controls 71% of the market.
Blocked, Denied, Upheld
In a striking example of bureaucratic obstruction, the New Jersey Department of Health denied an extension for a previously approved Certificate of Need for Newton Medical Center to add 9 new psychiatric beds. The initial CON had been granted, acknowledging the need for expanded mental health services in the community.
Explore the case of Kentucky, one of the most restrictive CON states in the nation.
States That Reformed
States That Reformed
States that have fully repealed their CON laws have seen increased competition, lower costs, and better access to care, particularly in rural areas. They demonstrate that a free market in healthcare delivery is possible and beneficial.
Data sourced from state Departments of Health, the Mercatus Center, and independent research.
Last updated: April 2026