Key terms

Certificate of need (CON)

A certificate of need is a state approval for a covered health care project under that state’s planning law. Coverage depends on the facility and proposed action. It does not establish every license, payer approval or permission needed to operate.

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Key takeaways

  • Check the proposed project as well as the existing business.
  • An issued exemption and an exclusion from a planning law are different findings.
  • A planning conclusion alone does not authorize the buyer to operate.

What does the planning review address?

Illinois describes its CON process as a review of need, financial and economic feasibility, and other project criteria. Covered construction, services or capacity changes can raise different questions from buying an existing operation. This is a state example, not a nationwide coverage list. (Illinois CON program)

An exemption can still require a decision. Illinois Part 1130.410 requires an application and an issued exemption for the transactions within that pathway. A transaction excluded by the statute presents a different question. Avoid using “exempt” as shorthand for both outcomes. (Illinois planning rules)

Why it matters in a senior care sale

Split the deal file into the existing operation, the proposed purchase and any planned project. For each, record the responsible authority, current rule, supporting documents and unresolved conditions. Connect that record to the buyer’s diligence review.

The licensing overview explains the wider layers of permission. A moratorium asks another question: whether a specified action is currently paused.

An illustrative acquisition and expansion

Suppose a buyer proposes to acquire an Illinois facility licensed under the Nursing Home Care Act and later add a wing. Assume the facility is neither county-operated nor an Illinois Veterans Home. Current section 3 excludes the specified ownership change from the Planning Act, while preserving Nursing Home Care Act requirements. (20 ILCS 3960/3)

That ownership finding does not establish permission for the proposed wing or the buyer’s license. Those remain separate work items. Rules checked September 7, 2026; the statute’s displayed January 2027 amendment is not used here. Continue with the Illinois ownership guide and the definitions of CHOW and provider agreement.

Frequently asked questions

Is a CON the same as an operating license?

No. A planning review addresses a covered project under its governing law. The operator must separately establish the licenses and other permissions needed for the actual services. A permit naming a project does not answer every question about the buyer, site or payer.

Does every senior care acquisition need a CON?

No single answer applies across states and care models. Review the current statute, rules and actual transaction. Illinois, for example, excludes specified nursing-home ownership changes while retaining stated exceptions and Nursing Home Care Act requirements.

Can a seller declare a project exempt?

A seller’s label is not evidence that a required exemption was issued. In the Illinois rule’s specified exemption pathway, an application and an issued exemption are required. First establish whether that pathway or a statutory exclusion actually applies.

Does an acquisition exclusion cover a later expansion?

Do not assume it does. The purchase and a planned expansion are different proposed actions. Review the new services, capacity, construction and applicable thresholds separately before treating the expansion as an approved part of the business plan.

Sources

Sources are dated to distinguish current guidance from earlier publications. They support the identified facts; the transaction questions and examples are educational analysis.

  1. Illinois HFSRB: Certificate of Need program (2026). Retrieved September 7, 2026.
  2. Illinois: Health Facilities Planning Act section 3 (2026 compiled text). Retrieved September 7, 2026.
  3. Illinois: Health Facilities Planning rules (2026). Retrieved September 5, 2026.
Jason Taken

Business broker · HedgeStone Business Advisors
jason.taken@hedgestone.com

AI-assisted educational content. Research methods and editorial standards. Published September 7, 2026.

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