SB 853 - HB 970
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
March 17, 2025
Fiscal Analyst: Christine Drescher | Email: christine.drescher@capitol.tn.gov | Phone: 615-741-2564
SB 853 - HB 970
SUMMARY OF BILL: Changes the name of the Tennessee Health Services and Planning Act of
2021 to the Tennessee Healthcare Quality and Access Act of 2025 (Act). Changes the definition of
“healthcare institution” to solely mean an agency, institution, facility, or place that provides health
services and that is a nursing home. Removes the requirement that certain entities receive a
certificate or need (CON) prior to the initiation of healthcare services.
Removes the requirement that that an applicant for a nonresidential substitution-based treatment
center for opiate addiction send notice to the state representative and senator representing the
district of the facility. Removes the requirement that owners of certain types of medical equipment
register the equipment with the Health Facilities Commission (HFC). Removes the requirements
that certain entities obtain a certificate of need if they are in an economically distressed eligible
county and a county that has no hospital that is actively licensed within the county.
Requires that a person that establishes a healthcare institution submit proof of accreditation by an
appropriate external peer-review organization for the service of facility to the HFC within two years
of the date of licensure of the healthcare institution.
Specifies that the Act only applies to healthcare institutions on or after June 30, 2025.
FISCAL IMPACT:
STATE GOVERNMENT
REVENUE Health Facilities Commission
FY25-26 & Subsequent Years ($504,500)
OTHER FISCAL IMPACT
The Health Facilities Commission may adjust other fees if necessary to collect sufficient revenue
from other sources to offset any reduction in certificate of need application fee revenue.
It is likely that the proposed legislation will result in an increase of facilities that previously required
a certificate of need, which may result in the need for increased staffing and result in an increase in
state expenditures; however, the number of new facilities and timings of openings cannot be
reasonably determined.
SB 853 - HB 970 2
Assumptions:
• Tennessee Code Annotated § 68-11-1602(10) currently defines “healthcare institution” as
an agency, institution, facility, or place, whether publicly or privately owned or operated,
that provides health services and that is one of the following: a nursing home, a hospital, an
ambulatory surgical treatment center, an intellectual disability institutional habilitation
facility, a home care organization, an outpatient diagnostic center, a rehabilitation center, a
residential hospice, or a nonresidential substation based treatment center for opiate
addiction.
• Pursuant to Tenn. Code Ann. § 68-11-1607(a), a CON is required to construct, develop, or
establish a type of healthcare institution, or to change the bed complement of a healthcare
institution.
• Under the provisions of the proposed legislation, a CON is no longer required for the
creation of a burn unit, neonatal intensive care unit, open heart surgery, organ
transplantation, cardiac catheterization, linear accelerator, home health, hospice, or opiate
addiction treatment provided through a nonresidential substitution-based treatment center
for opiate addiction.
• Therefore, the proposed legislation removes the requirement for a CON for all entities
other than nursing homes.
• According to the Rules of the Tennessee Health Facilities Commission 0702-10-02(5), the
application fee for a CON is $2.25 per $1,000 of estimated project costs, with a minimum
of $3,000 and a maximum of $45,000.
• According to the HFC, from 2022 through 2024, HFC processed a total of 78 CON
applications and collected an average of $533,482 in fees per year. Of those, 4 applications
were for nursing homes, with average fee collections of $29,006.
• The proposed legislation will therefore result in a recurring fee revenue reduction of
$504,476 ($533,482 - $29,006), beginning in FY25-26.
• Pursuant to Tenn. Code Ann. § 68-11-1620(b), the HFC is required to be self-sufficient,
and under Tenn. Code Ann. § 68-11-1620(c), the HFC collects annual fees for various
healthcare providers.
• Therefore, the HFC will have the ability to adjust fees if necessary to collect sufficient
revenues from other sources to offset any reduction in CON application fee revenue.
• Based on information provided by the HFC, two positions within the commission are
directly involved in the CON process. The department will not realize a significant decrease
in state expenditures due, in part, to the remaining requirement to provide CONs to
nursing homes.
• Removing the requirement that an applicant for a nonresidential substitution-based
treatment center for opiate addiction send notice to their state representative or senator is
not anticipated to result in any significant operational or fiscal impact.
• Requiring a person that establishes a healthcare institution to submit proof of accreditation
within two years of licensure will be borne of private costs to that institution, and can be
handled by the HFC by utilizing existing resources.
• It is likely that the proposed legislation will result in an increase of facilities that previously
required a CON, which may result in the need for increased staffing and result in an
increase in state expenditures; however, the number of new facilities and timings of
openings cannot be reasonably determined.
SB 853 - HB 970 3
IMPACT TO COMMERCE:
OTHER COMMERCE IMPACT
The precise impact on commerce and jobs in this state cannot be reasonably determined.
Assumption:
• The precise impact on commerce and jobs in this state cannot be reasonably determined.
CERTIFICATION:
The information contained herein is true and correct to the best of my knowledge.
Bojan Savic, Executive Director