Healthcare providers considering construction, expansion, renovation, equipment purchases, or other capital projects in Mississippi should be aware of important changes to the state’s Certificate of Need laws in 2026.
Mississippi House Bill 3 revised several provisions of the state’s healthcare Certificate of Need, or CON, laws, including a significant increase in the minimum capital expenditure amounts that can trigger Certificate of Need review. The legislation became effective upon passage and was signed on February 4, 2026.
For hospitals, healthcare facilities, physician groups, developers, and other healthcare organizations planning future investments, the higher capital expenditure thresholds could affect whether a proposed project requires CON review.
However, project cost is only one factor in determining whether a Certificate of Need is required. Understanding the distinction is important before moving forward with a healthcare project.
What Changed With Mississippi Certificate of Need Laws in 2026?
One of the most significant changes made by House Bill 3 was an increase in the capital
expenditure and major medical equipment thresholds used in determining whether certain
projects are subject to Certificate of Need review.
The legislation increased the applicable capital expenditure thresholds to twice their previous
levels.
Per the Mississippi State Department of Health, the following adjusted amounts for State Fiscal
Year 2026 now apply:
Non-clinical health services: $20 million
Clinical health services: $10 million
Major medical equipment: $3 million
Previously, the corresponding thresholds were $10 million for non-clinical health services, $5
million for clinical health services, and $1.5 million for major medical equipment.
In practical terms, the 2026 legislation substantially increases the amount that may be spent on
certain healthcare projects before the capital expenditure itself becomes a trigger for CON
review. Although this increase is certainly helpful to Mississippi healthcare providers and
organizations seeking to engage in new projects within the State, it is important to remember
that there are many types of services and projects that require CON review regardless of the
capital expenditure threshold.
Why Did Increasing the CON Thresholds Matter?
Healthcare construction and medical equipment costs have risen considerably over time. A
project that might once have represented an unusually large capital investment can now be a
relatively routine renovation, expansion, or equipment acquisition.
Raising the thresholds means some projects that may previously have crossed the capital
expenditure threshold could now fall below it.
For healthcare organizations, this can have a meaningful impact during the earliest stages of
project planning.
A facility considering a multimillion-dollar renovation, for example, may reach a different initial
conclusion regarding CON review under the new thresholds than it would have under the prior
limits.
Likewise, the increased threshold for major medical equipment may affect the regulatory
analysis surrounding certain equipment acquisitions.
But there is an important caution.
Spending Less Than the Threshold Does Not Automatically Mean You Do Not Need a CON
One of the most important things for healthcare providers to understand about the 2026
changes is that capital expenditure is not the only factor that can trigger a Certificate of
Need review in Mississippi.
Mississippi’s CON program regulates certain healthcare facility developments, expansions,
acquisitions, equipment purchases, and additions of healthcare services. Depending on the
nature of a proposed project, CON requirements may apply regardless of whether the project’s
cost exceeds one of the new capital expenditure thresholds.
For example, CON considerations may arise in connection with projects involving:
Development of certain types of new healthcare facilities and services
Expansion of existing facilities
Addition or relocation of healthcare beds
Addition of particular healthcare services or programs
Certain facility ownership transactions or acquisitions
The specific facts surrounding the project matter.
That is why healthcare organizations should avoid assuming that a project falling below $10
million, $20 million, or $3 million is automatically exempt from CON review.
What Is Considered a Clinical Versus Non-Clinical Capital Expenditure?
The distinction between clinical and non-clinical health services becomes particularly important under the new thresholds because the applicable spending limits are substantially different.
For State Fiscal Year 2026, the threshold associated with clinical health services is $10 million, while the threshold associated with non-clinical health services is $20 million.
Determining how a proposed project should be categorized can therefore have significant regulatory consequences.
Rather than relying solely on a project’s name or internal budget classification, healthcare organizations should evaluate the actual nature and purpose of the proposed expenditures as part of their CON analysis.
Major Medical Equipment Has a New $3 Million Threshold
The legislation also increased the capital expenditure threshold applicable to major medical equipment.
MSDH currently lists the State Fiscal Year 2026 adjusted amount for major medical equipment at $3 million, compared with the prior $1.5 million amount.
This change may be particularly relevant for hospitals, diagnostic imaging providers, physician groups, and other organizations planning significant equipment investments.
However, equipment cost should not be viewed in isolation.
Mississippi’s CON framework contains requirements addressing certain types of medical equipment and services, and reviewability may depend on factors beyond the purchase price alone. For that reason, an organization considering a significant medical equipment purchase should evaluate the CON implications before executing purchase, lease, or development agreements.
What Should Mississippi Healthcare Providers Do Before Starting a New Project?
The higher thresholds may provide healthcare organizations with additional flexibility, but they also make proper pre-project analysis increasingly important.
Before committing significant resources to a healthcare construction project, expansion, service addition, or equipment acquisition, organizations should consider several questions:
What exactly is the project?
Determine whether the proposal involves construction, renovation, expansion, relocation, equipment acquisition, additional beds, new services, or another regulated activity.
What is the total anticipated capital expenditure?
Project costs should be carefully evaluated before determining whether the applicable capital expenditure threshold has been crossed.
Is the project clinical or non-clinical?
The classification could determine whether the $10 million or $20 million threshold applies.
Does another CON requirement apply even if the project is below the capital threshold?
This is particularly important. A project may be reviewable because of the facility, service, equipment, beds, or activity involved rather than simply because of its cost.
Should reviewability be addressed before contracts are finalized?
Resolving CON questions early can help healthcare organizations identify regulatory issues before significant financial commitments are made.
The 2026 Changes Make Early CON Planning Even More Important
At first glance, increasing the capital expenditure thresholds may appear to simplify Mississippi’s Certificate of Need requirements.
For some projects, it may.
But the larger thresholds do not eliminate Mississippi’s CON program, nor do they eliminate the need to analyze whether particular healthcare projects remain subject to review.
The Mississippi State Department of Health continues to administer the CON program, which evaluates certain healthcare projects based on factors including healthcare needs, facility planning, location, size, and other requirements.
Healthcare organizations planning investments in 2026 and beyond should therefore incorporate CON analysis into the early stages of strategic and capital planning.
Experienced Mississippi Certificate of Need Counsel
Gilchrist Donnell has more than three decades of experience guiding healthcare organizations through Mississippi’s Certificate of Need process.
Our attorneys assist clients with evaluating whether proposed projects require CON approval, strategic pre-application planning, preparing and filing applications, responding to regulatory requests, contested proceedings, administrative hearings, and appeals. Our CON experience includes projects involving ambulatory surgical facilities, hospitals, skilled nursing facilities, MRI and PET equipment, cardiac-cath services, and other complex healthcare projects.
If your organization is considering a healthcare construction project, expansion, service addition, acquisition, or major equipment purchase, understanding how Mississippi’s 2026 Certificate of Need law changes apply before the project begins can help identify regulatory risks and determine the appropriate path forward.
Contact Gilchrist Donnell to discuss Certificate of Need requirements for your proposed Mississippi healthcare project.
This article is provided for general informational purposes only and does not constitute legal advice. Certificate of Need requirements depend on the specific facts and circumstances of each project.
