Tennessee GOP Moves to Further Reshape Certificate of Need Laws

NASHVILLE — Tennessee lawmakers are advancing new proposals to further roll back the state’s Certificate of Need (CON) regulations, continuing a sweeping overhaul of healthcare policy that began with last year’s reforms.

The 2024 passage of Public Chapter No. 985 (HB2269/SB2009) significantly altered the state’s healthcare landscape by eliminating CON requirements for certain facilities, including ambulatory surgical treatment centers (ASTCs) and diagnostic imaging services. It also set the stage for freestanding emergency departments (FSEDs) to operate without a CON beginning July 1, 2025.

Now, Republican lawmakers are pushing additional measures in the 114th General Assembly to further ease restrictions on healthcare facility expansion. Notable proposals include:

House Bill 0819 (HB0819) – Seeks to eliminate CON requirements for acute care hospitals beginning July 1, 2028.

Senate Bill 0853 (SB0853) – Amends state law to remove language that ties certain healthcare services to CON approval.

Senate Bill 1269 (SB1269) – Introduces a phased approach to further CON deregulation, with some provisions taking effect immediately upon passage and others in mid-2025.

The Tennessee Health Facilities Commission (HFC) remains responsible for overseeing the implementation of CON law changes. The commission is set to review compliance measures and new facility applications during its next meeting on February 26, 2025, in Nashville.

Meanwhile, healthcare providers and investors are closely watching the HFC’s “Waiting Room” portal, where active CON applications and related regulatory decisions are publicly available.

Proponents argue that loosening CON laws will expand access to care, increase competition, and lower costs, particularly in underserved areas.

“This is about removing barriers and letting the free market determine where healthcare services are needed,” said Senator Shane Reeves (R-District 14), a leading advocate for deregulation.

However, opponents, including the Tennessee Hospital Association (THA), warn that rural hospitals could suffer as profit-driven outpatient centers siphon away revenue from full-service hospitals.

“The financial viability of many rural hospitals is already fragile. Further weakening CON laws could push some of these facilities toward closure,” said THA CEO Wendy Long, MD.

As these bills move through committee hearings, the debate over Tennessee’s healthcare future intensifies. The HFC’s February 26 meeting will provide insight into how the state plans to enforce the 2024 law while navigating the latest legislative proposals.

For now, the state’s trajectory remains clear: Tennessee is continuing its aggressive push toward deregulating healthcare expansion.

Official Sources: Tennessee General Assembly, Tennessee Health Facilities Commission, Tennessee Hospital Association