In a significant policy shift, Tennessee has revised its certificate-of-need (CON) law, streamlining the process for providers to introduce new advanced imaging services. Governor Bill Lee recently signed the measure into law on May 21, marking a departure from previous regulatory requirements.
The updated legislation eliminates CON mandates specifically pertaining to MRI and PET services, as well as other facilities such as freestanding emergency departments and ambulatory surgery centers. The advocacy for this law change was championed by for-profit hospital giant HCA Healthcare, contrasting with opposition from the Tennessee Hospital Association (THA).
THA CEO Wendy Long, MD, expressed concerns about the potential repercussions of the revised law, emphasizing its impact on hospital sustainability and patient access to comprehensive healthcare services. Under the current Tennessee law, providers must obtain a CON before installing a new PET scanner in counties with populations fewer than 175,000. However, following the recent amendment, accreditation by the American College of Radiology within two years of licensing suffices. This modification is slated to take effect on December 1, 2025.
Furthermore, the legislation removes CON requirements for initiating MRI services or expanding scanner capacity in the state. Nevertheless, imaging providers are still obligated to notify the Tennessee Health Facilities Commission when introducing new services and indicate whether patients under 14 will be imaged. These changes are also scheduled to come into effect in December of next year.
CON laws serve as regulatory mechanisms at the state level, aiming to approve significant capital investments for select healthcare facilities. While designed to control costs and prevent unnecessary expansion, critics argue that CON laws can stifle competition. With about 35 states and Washington currently operating CON programs, Tennessee’s decision to relax its regulations aligns with a broader trend.
HCA Healthcare’s advocacy for this reform underscores its ongoing efforts to navigate regulatory hurdles, particularly regarding the establishment of satellite emergency departments in the Nashville area. Libertarian conservative group Americans for Prosperity hailed the decision, citing estimates that Tennessee’s CON program has hindered approximately $1.5 billion in healthcare investments since 2000. AFP-TN State Director Tori Venable emphasized that eliminating CON laws enhances access to healthcare services, fosters competition, and ultimately drives down healthcare costs, particularly benefiting rural communities.