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The Governor of Tennessee recently signed House Bill 2269 into law, creating new exemptions for the state’s certificate of need (CON) process and changing existing CON regulations. Below is a summary of the major legislative changes to Tennessee’s CON process.
Tennessee’s Hospital and ASC Exemptions
The new legislation made a significant change to requirements for freestanding emergency departments. Starting July 1, 2025, hospitals will no longer be required to obtain a certificate of need to establish a freestanding emergency department at a location within ten (10) miles of the hospital’s main campus. However, the satellite emergency department must be at least ten (10) miles away from any other actively licensed acute care hospital.
The legislation removed the requirement for ambulatory surgery centers (ASCs) to obtain a CON, but the bill added new licensing requirements for ASCs. All ASCs must now participate in the TennCare medical assistance program and provide the same amount of care to patients who are enrolled in TennCare as similarly situated hospital-based ASCs. Additionally, ASCs must now provide an amount of charity care that is comparable to similarly situated hospital-based ambulatory surgical treatment centers. This change takes effect on December 1, 2027.
Other Expanded CON Exemptions
The bill also created these new CON exemptions:
- Positron Emission Tomography (PET). Rather than CON review, a provider must show it has been accredited by the American College of Radiology within two (2) years of the date of licensure. (Effective December 1, 2025)
- Magnetic Resonance Imaging (MRI). Rather than CON review, prospective MRI providers must notify the Commission in writing that services are being initiated and must indicate if MRI will be provided to patients under 14 years old on more than 5 occasions per year. (Effective December 1, 2025)
- The establishment of an intellectual disability institutional habilitation facility, burn unit, and neonatal intensive care units (Effective December 1, 2025)
- Initiation of linear accelerator services (Effective December 1, 2027)
- Initiation of open-heart surgery services (Effective December 1, 2029)
Future Legislation and the Tennessee State Health Plan
The bill mandates the Tennessee Health Facilities commission to study the impact of the certificate of need and facility licensure legislation changes on the healthcare industry. This could potentially present further changes to the CON process and regulations.
In March 2024, the Tennessee Department of Health published the 2024-2026 State Health Plan,[1] presenting 8 recommendations to meet the needs of Tennesseans and improve the health outcomes of the state. The plan gives potential opportunities for health care providers to develop facilities or services to meet the needs outlined.
The Criteria and Standards that guide the development of health care programs and services are available on the Health Facilities Commission website. For many of the CON-regulated services, the criteria and standards include worksheets that include the need formula outlined by the state.
Until the exemptions above take place, CON is still required for the development of the following healthcare providers:
- Hospital;
- Nursing Home;
- Ambulatory Surgical Treatment Center (ASTC);
- Intellectual Disability Institutional Habilitation Facility;
- Home Care Organization (Home Health[2] and Hospice);
- Outpatient Diagnostic Center (ODC);
- Rehabilitation Facility;
- Residential Hospice; and
- Nonresidential Substitution-based Treatment Center for Opiate Addiction
CON Review is also required before initiating any of the following services:
- Burn Unit;
- Neonatal Intensive Care Unit;
- Open Heart Surgery (until exemption takes effect);
- Organ Transplantation;
- Cardiac Catheterization;
- Linear Accelerator (until exemption takes effect)
RPC provides Certificate of Need (CON) services to healthcare providers nationally. Our experience spans 30 years and about as many states. We work closely with the healthcare provider’s staff to assemble information to address the state’s criteria and requirements. We work to anticipate the arguments that opponents and competing applicants will make in the project design and the supporting documentation.
[1] Link to Tennessee State Health Plan: https://www.tn.gov/health/health-program-areas/state-health-plan.html
[2] Note, CON review is not required to establish a home health agency limited to providing services to patients less than 18 years of age.
View House Bill 2269 Here
Learn More About RPC’s CON Services Here