This post uses hypothetical scenarios for illustrative purposes only. It does not describe any actual client, transaction, or representation, and is not legal advice.
Florida spent years dismantling its certificate of need regime. The 2019 legislation took hospitals out from under it, and a lot of health care operators filed that away as “Florida repealed CON” and stopped thinking about it. The Agency for Health Care Administration’s own program page is blunt about what is left: the CON program currently regulates hospices, freestanding inpatient hospice facilities, skilled nursing facilities, and intermediate care facilities for the developmentally disabled.
Hospice is on that list. So the common scenario — a regional operator signs a letter of intent to buy a Florida hospice program, assumes a sixty-day close, and discovers in week three that the thing that makes the business a business is a state authorization that does not simply travel with the deal — is entirely avoidable, and mostly a function of nobody having read Chapter 408 before signing.
The statutory architecture, in the order it bites
Start with Section 408.036(1)(d) of the Florida Statutes, which makes “[t]he establishment of a hospice or hospice inpatient facility” subject to CON review, except as provided in Section 408.043. Section 408.032(8) defines “health care facility” to mean a skilled nursing facility, hospice, or intermediate care facility for the developmentally disabled — so a hospice is squarely inside the Health Facility and Services Development Act, Sections 408.031 through 408.045.
The exemptions in Section 408.036(3)(a) are narrow enough that most buyers should assume they do not apply: hospice services or swing beds in a rural hospital, and a hospice program established by an entity sharing a controlling interest with a not-for-profit retirement community designated as a teaching nursing home for at least five years, limited to one hospice program per teaching nursing home.
Then Section 408.036(2)(a): “Transfer of a certificate of need” is a project subject to expedited review. That word does real work — Section 408.032(7) defines expedited review as the process by which certain applications are not subject to the review cycle requirements of Section 408.039(1) or the letter of intent requirement of Section 408.039(2). No batching cycle, no thirty-day letter of intent. AHCA states that CON decisions are rendered sixty days after an application is declared complete.
Here is the piece that surprises people, and it is the single most important structural fact in a Florida hospice deal.
For an operating hospice, the CON is usually already gone
Section 408.810(10) provides that AHCA may not license a provider subject to the CON provisions unless that provider has been issued a CON or an exemption, and then: “Upon initial licensure of any such provider, the authorization contained in the certificate of need shall be considered fully implemented and merged into the license and shall have no force and effect upon termination of the license for any reason.”
The CON merges into the license. Once a hospice is up and running, there is generally no free-standing certificate of need sitting there to be assigned. What the target holds is a license — and a license under Chapter 408, Part II, the Health Care Licensing Procedures Act, is not transferable either.
So the transaction is a change of ownership, and Section 408.807 governs it with four requirements that ought to be on every deal checklist. The transferor must notify AHCA in writing at least sixty days before the anticipated date of the change of ownership. The transferee must apply for a license within the timeframes of Section 408.806 — and Section 408.806(2)(b) requires that a change-of-ownership application be received at least sixty days prior to the date of the change of ownership. The transferor remains responsible and liable for lawful operation and client welfare until the date the transferee is licensed, and for penalties for pre-closing violations. And any restriction on licensure, including a conditional license, survives the change of ownership and remains in effect until AHCA determines the grounds are corrected.
That last one is a diligence item disguised as a procedural note. A conditional license does not get washed clean by the sale. Buy the operator, buy the restriction.
Two hospice-specific overlays sit on top. Section 400.606(1) requires that a change-of-ownership application be accompanied by a plan for the delivery of home, residential, and homelike inpatient hospice services — estimated monthly census, geographic service area, service list, staffing by discipline, contractee names and qualifications, and a volunteer recruitment and training plan. And Section 408.810(8) requires proof of financial ability to operate on a change-of-ownership application, with a narrow exemption for providers licensed at least five years where the change is a corporate reorganization leaving the controlling interest unchanged, or is due solely to the death of a controlling-interest holder with surviving interests retaining at least 51 percent.
The structuring point most buyers miss
Where a CON has been issued but not yet implemented — an approved program that is not yet licensed and operating — the transfer application under Section 408.036(2)(a) becomes live, and Rule 59C-1.0085 of the Florida Administrative Code sets the mechanics. The proposed transferee is the applicant. The application fee is $10,000 provided there is no increase in the approved project cost, with increases priced under Section 408.038’s formula of a $10,000 base plus 0.015 of each dollar of proposed expenditure, capped at $50,000. A transfer application gets reviewed against the full Section 408.035 review criteria — this is not a rubber stamp. And on written request received at least fifteen days before the CON’s termination date, AHCA will extend the validity period by sixty days.
Now the provision worth structuring around. Rule 59C-1.0085(8) states that no transfer application is required if a change in the intended initial licensee or operator of an authorized project occurs because of a corporate merger or a change in the corporate name.
That is a genuine fork in the road. An equity purchase or asset purchase that changes the licensee triggers the transfer application; a statutory merger, on the rule’s own terms, does not. The tradeoff is the usual one — a merger carries liabilities by operation of law where an asset purchase can leave some behind — so this is not a free win. But it belongs in the structuring conversation at the term sheet stage rather than after the deal shape is locked. The same instinct applies across Florida licensed-provider deals; we have walked through the parallel analysis for home health agency change of ownership under 408.806 and for assisted living facility transfers under Chapter 429, and the licensure timing drives the closing schedule in all of them.
Your competitors have a statutory right to slow you down
One more feature of the hospice regime deserves attention, because it has no real analogue in most Florida licensed-business deals.
Section 400.606(3) provides that a licensed hospice “is a health care facility as that term is used in s. 408.039(5) and is entitled to initiate or intervene in an administrative hearing.” And Section 408.039(5)(c) extends intervention rights to existing health care facilities on a showing that an established program will be substantially affected by issuance of any certificate of need — expressly “whether reviewed under s. 408.036(1) or (2).”
Read that carefully. The intervention right reaches subsection (2) proceedings, which is where expedited transfers live. A competing hospice in the same district has a statutory hook to intervene in a transfer, request a hearing within twenty-one days of publication of the State Agency Action Report, and send the matter to the Division of Administrative Hearings. Hearings commence within sixty days of assignment absent continuance, the recommended order issues within thirty days of proposed recommended orders, and AHCA’s final order comes within forty-five days of receipt of the recommended order — with judicial review to the district court of appeal after that.
Those numbers add up to a horizon well beyond any normal outside date. A hospice purchase agreement that treats regulatory approval as a routine condition, with a ninety-day outside date and no extension mechanic, is mispriced.
What goes in the agreement
Four drafting responses follow from all of this.
First, build the sixty-day pre-closing filing into the covenant structure explicitly, with the seller obligated to give its Section 408.807(1) notice and cooperate on the transferee’s Section 408.806(2)(b) application, and with a specific deadline measured backward from the target closing date rather than forward from signing.
Second, set the outside date against the realistic administrative timeline, and include an automatic extension if a competitor requests a hearing. A right to terminate that springs before the administrative process could plausibly conclude just hands one party a free option.
Third, treat licensure restrictions as a distinct diligence and representation category, given that Section 408.807(4) carries them across the closing. A representation that the target holds a license in good standing is not the same as a representation that no conditional status or unresolved restriction exists.
Fourth, allocate the interim risk deliberately. Section 408.807(3) leaves the transferor responsible for lawful operation and client welfare until the transferee is licensed, which means the seller retains regulatory exposure during a period when the buyer may already be economically at risk. Management agreements, indemnity scope, and purchase price escrow all have to be sized against that gap rather than against the closing date.
None of this makes a Florida hospice a bad acquisition. The CON regime is, if anything, part of why these businesses are valuable — the barrier to entry is real and statutory. It just means the regulatory path is the critical path, and pricing the deal as though licensure is an administrative formality is the error to avoid. For a broader picture of how regulatory approvals interact with deal structure, see our mergers and acquisitions overview. The current text of the statute is available from the Florida Legislature’s Online Sunshine site.
If you are buying or selling a Florida hospice and trying to map the licensure timeline onto your closing schedule, feel free to reach out to our firm manager, Magda, at Magda@montague.law, or fill out our contact form. Mention you read this post.
