Connecticut Signals Increased Scrutiny of Physician Practice Acquisitions

On July 21, 2023, the Executive Director of the Connecticut Office of Health Strategy (“OHS”), sent a letter to Connecticut physicians reminding them of the requirement for certain practice transactions to obtain Certificate of Need (“CON”) approval prior to closing. OHS further cautioned those who do not seek CON approval for transactions that require CON could be subject to $1,000 per day civil penalties for noncompliance. Finally, OHS encouraged increased use of the CON Determination process to seek an advance decision from OHS as to whether CON approval is needed for a particular deal. This letter follows inquiries OHS has made into specific physician-practice transactions consummated earlier this year.

Notwithstanding this letter, there have not been any statutory or regulatory changes to the kinds of transactions requiring CON approval. It is clear, however, that OHS is closely monitoring the physician practice landscape in Connecticut and will closely scrutinize physician practice transactions.

Those parties contemplating deals involving physician practices should carefully consider all options for structuring such transactions and thoroughly analyze the potential need for CON approval in Connecticut. Please contact the author or the Garfunkel Wild attorney with whom you regularly work, or contact us at info@garfunkelwild.com so that we can help you with your transaction and related CON needs in Connecticut.