State scales back certificate-of-need law, making it easier to add new advanced imaging services
A southern state recently scaled back its certificate of need law, making it easier for providers to add new advanced imaging offerings.
Tennessee Gov. Bill Lee (R) officially signed the measure into law on May 21. It removes CON requirements related to MRI and PET, along with other facilities such as freestanding emergency departments or ambulatory surgery centers. For-profit hospital giant HCA Healthcare has advocated for the law change, while the Tennessee Hospital Association opposed it.
“Our state’s certificate of need law helps ensure hospitals are able to continue providing services that may be less profitable but are vital to patients and communities,” THA CEO Wendy Long, MD, said in a statement issued before the bill’s passage. “The proposed changes to the law will undermine the sustainability of local hospitals and patient access to a full range of healthcare services.”
Current Tennessee law requires providers to obtain a certificate of need before adding a new PET scanner in counties with populations of fewer than 175,000. But following the change, they only need to become accredited by the American College of Radiology within two years of being licensed, according to a summary of the bill provided by law firm Holland & Knight. This modification will take effect on Dec. 1, 2025.
Meanwhile, the bill also removes CON requirements for initiating MRI services or increasing the number of scanners in the Volunteer State. However, imaging providers still need to notify the Tennessee Health Facilities Commission when initiating new services and note whether they plan to image patients under 14. This too will take effect in December of next year.
CON laws are state regulatory mechanisms for approving major capital expenditures for certain healthcare facilities, according to the National Conference of State Legislatures. Such regulations are meant to control costs and avoid unnecessary or duplicative expansion in a defined geography. However, critics have accused hospitals and other provider entities of wielding CON laws inappropriately to limit competition. About 35 states and Washington operate CON programs, according to the NCSL. New Hampshire was the last to repeal its law, which it did in 2016.
HCA Healthcare, the largest hospital system in the U.S., has fought for years to open satellite EDs in the Nashville area. But it has run into roadblocks due to the state’s CON law, the Tennessee Lookout reported in April.
Libertarian conservative political advocacy group Americans for Prosperity applauded the decision. It estimated that Tennessee’s CON program has denied nearly $1.5 billion in proposed healthcare investments since 2000.
“Tennesseans should not need a government permission slip to access healthcare services,” AFP-TN State Director Tori Venable said in a statement. “Ending certificate of need laws is vital for our entire state, especially in rural counties. These reforms increase access to emergency life-saving care and encourage more competition—ultimately leading to lower healthcare costs for Tennesseans.”
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.