In 1988 New York State imposed a moratorium on the development of new psychiatric beds for children because the state's certificate-of-need law lacked objective criteria for evaluating applications. The following year the department introduced revised certificate-of-need regulations that incorporated more specific program criteria, based on the department's policies, as well as a quantitative methodology for estimating the number of children's beds needed in general hospitals and private specialty hospitals. The methodology led to a planning figure of 10,000 admissions of children to acute care for 1995. It disaggregated the expected admissions to each of the state's 15 children's service areas and also established expected average lengths of stay for each service area. The authors outline the program criteria, the bed-need methodology, and results of the calculations.