HOUSE BILL 970
By Hawk
SENATE BILL 853
By Taylor
SB0853
001424
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AN ACT to amend Tennessee Code Annotated, Title 4;
Title 34; Title 42; Title 56; Title 63; Title 68; Title 71
and Chapter 985 of the Public Acts of 2024,
relative to certificates of need.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Chapter 985 of the Public Acts of 2024, is amended by deleting
subdivisions (2)-(5) from Section 22, and by deleting Sections 1-10 and 12-17.
SECTION 2. Tennessee Code Annotated, Section 68-11-1601, is amended by deleting
the section and substituting:
This part is known and may be cited as the "Tennessee Healthcare Quality and
Access Act of 2025."
SECTION 3. Tennessee Code Annotated, Section 68-11-1602(10), is amended by
deleting the subdivision and substituting:
(10) "Healthcare institution" means an agency, institution, facility, or place,
whether publicly or privately owned or operated, that provides health services and that is
a nursing home;
SECTION 4. Tennessee Code Annotated, Section 68-11-1602(18)(B), is amended by
deleting the language "healthcare institution" and substituting "facility".
SECTION 5. Tennessee Code Annotated, Section 68-11-1607, is amended by deleting
the section and substituting:
(a) A person shall not perform the following actions in this state, except after
applying for and receiving a certificate of need for the action:
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(1) The construction, development, or other establishment of a type of
healthcare institution as described in this part;
(2) In the case of a healthcare institution, a change in the bed
complement, regardless of cost, that:
(A) Increases by one (1) or more the number of nursing home
beds;
(B) Redistributes beds from any category to acute, rehabilitation,
or long-term care, if at the time of redistribution, the healthcare institution
does not have beds licensed for the category to which the beds will be
redistributed; or
(C) Relocates beds to another facility or site;
(3)
(A) Except as provided in subdivision (a)(3)(D), a change in the
location of existing or certified facilities providing healthcare services and
healthcare institutions. However, the executive director may issue an
exemption for the relocation of existing healthcare institutions and
approved services if the executive director determines that:
(i) At least ninety-five percent (95%) of patients to be
served are reasonably expected to reside in the same zip codes
as the existing patient population;
(ii) The relocation will not reduce access to consumers,
particularly those in underserved communities; those who are
uninsured or underinsured; women and racial and ethnic
minorities; TennCare or medicaid recipients; and low-income
groups; and
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(iii) The payor mix will not include an increase in
commercial insurance;
(B) The executive director must notify the commission of an
exemption granted pursuant to subdivision (a)(3)(A) at the next regularly
scheduled commission meeting; and
(C) An exemption granted or denied by the executive director
pursuant to subdivision (a)(3)(A) is subject to commission review in the
same manner as described in § 68-11-277(g) and (h).
(b) An agency of this state, or of a county or municipal government, shall not
approve a grant of funds for, or issue a license to, a healthcare institution for a portion or
activity of the healthcare institution that is established, modified, relocated, changed, or
resumed, or that constitutes a covered healthcare service, in violation of this part. If an
agency of this state, or of a county or municipal government, approves a grant of funds
for, or issues a license to, a person or institution for which a certificate of need was
required but was not granted, then the license is void, and the person or institution shall
refund the funds to the state within ninety (90) days. The health facilities commission
has the authority to impose civil penalties and petition a circuit or chancery court having
jurisdiction to enjoin a person who is in violation of this part.
(c)
(1) For each application, a letter of intent must be filed between the first
day of the month and the fifteenth day of the month prior to the application's
submission. At the time of filing, the applicant shall cause the letter of intent to
be published in a newspaper of general circulation in the proposed service area
of the project. The published letter of intent must contain a statement that any:
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(A) Healthcare institution wishing to oppose the application must
file written notice with the commission no later than fifteen (15) days
before the commission meeting at which the application is originally
scheduled; and
(B) Other person wishing to oppose the application may file a
written objection with the commission at or prior to the consideration of
the application by the commission, or may appear in person to express
opposition.
(2) Persons desiring to file a certificate of need application seeking a
simultaneous review regarding a similar project for which a letter of intent has
been filed shall file with the commission a letter of intent between the sixteenth
day of the month and the last day of the month of publication of the first filed
letter of intent. A copy of a letter of intent filed after the first letter of intent must
be mailed or delivered to the first filed applicant and must be published in a
newspaper of general circulation in the proposed service area of the first filed
applicant. The health facilities commission shall consider and decide the
applications simultaneously. However, the commission may refuse to consider
the applications simultaneously if it finds that the applications do not meet the
requirements of "simultaneous review" under the rules of the commission.
(3) Applications for a certificate of need, including simultaneous review
applications, must be filed by the first business day of the month following the
date of publication of the letter of intent.
(4) If there are two (2) or more applications to be reviewed
simultaneously in accordance with this part and the rules of the commission, and
one (1) or more of those applications are not deemed complete by the deadline
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to be considered at the next commission meeting, then the other applications that
are deemed complete by the deadline must be considered at the next
commission meeting. The application or applications that are not deemed
complete by the deadline to be considered at the next commission meeting will
not be considered with the applications deemed complete by the deadline to be
considered at the next commission meeting.
(5) Review cycles begin on the fifteenth day of each month. Review
cycles are thirty (30) days. The first meeting at which an application can be
considered by the commission is the meeting following the application's review
cycle. If an application is not deemed complete within sixty (60) days after initial
written notification is given to the applicant by commission staff that the
application is deemed incomplete, then the application is void. If the applicant
decides to resubmit the application, then the applicant shall comply with all
procedures as set out by this part and pay a new filing fee when submitting the
application. Prior to deeming an application complete, the executive director
shall ensure independent review and verification of information submitted to the
commission in applications, presentations, or otherwise. The purpose of the
independent review and verification is to ensure that the information is accurate,
complete, comprehensive, timely, and relevant to the decision to be made by the
commission. The independent review and verification must be applied, but not
necessarily be limited, to applicant-provided information as to the number of
available beds within a region, occupancy rates, the number of individuals on
waiting lists, the demographics of a region, the number of procedures, and other
critical information submitted or requested concerning an application, and staff
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examinations of data sources, data input, data processing, and data output, and
verification of critical information.
(6) An application filed with the commission must be accompanied by a
nonrefundable examination fee fixed by the rules of the commission. The
examination fee may be applied to a second application for the same project if
the letter of intent for the first application is voided for non-compliance with law or
rule by the executive director, the commission, or a court. The second
application must be filed with the commission within ninety (90) days of the
voiding of the first letter of intent for the examination fee to be applied.
(7) Information provided in the application or information submitted to the
commission in support of an application must be true and correct. Substantive
amendments to the application, as defined by rule of the commission, are not
allowed.
(8) An applicant shall designate a representative as the contact person
for the applicant and shall notify the commission, in writing, of the contact
person's name, address, and telephone number. The applicant shall immediately
notify the commission in writing of a change in the identity or contact information
of the contact person. In addition to other methods of service permitted by law,
the commission may serve by registered or certified mail a notice or other legal
document upon the contact person at the person's last address of record in the
files of the commission. Notwithstanding a law to the contrary, service in the
manner specified in this subdivision (c)(8) constitutes actual service upon the
applicant.
(9)
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(A) If an application involves a healthcare facility in which a
county or municipality is the lessor of the facility or real property on which
it sits, then, within ten (10) days of filing the application, the applicant
shall notify the chief executive officer of the county or municipality of the
filing, by certified mail, return receipt requested.
(B) An application subject to the notification requirements of this
subdivision (c)(9) is not complete if the applicant has not provided proof of
compliance with this subdivision (c)(9) to the commission.
(d) Communications with the members of the commission are not permitted
once the letter of intent initiating the application process is filed with the commission.
Communication between commission members and commission staff is not prohibited.
Communication received by a commission member from a person unrelated to the
applicant or party opposing the application must be reported to the executive director,
and a written summary of the communication must be made part of the certificate of
need file.
(e) For purposes of this part, commission action is the same as administrative
action, as defined in § 3-6-301.
(f)
(1) Notwithstanding this section to the contrary, Tennessee state
veterans' homes under title 58, chapter 7, are not required to obtain a certificate
of need pursuant to this section.
(2) Notwithstanding this section to the contrary, the beds located in a
Tennessee state veterans' home pursuant to title 58, chapter 7, must not be
considered by the health facilities commission when granting a certificate of need
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to a healthcare institution due to a change in the number of licensed beds,
redistribution of beds, or relocation of beds pursuant to this section.
(g) After a person holding a certificate of need has completed the actions for
which the certificate of need was granted, the time to complete activities authorized by
the certificate of need expires.
(h)
(1) Notwithstanding subdivision (a)(2)(A) or (a)(3), a nursing home may
increase its total number of licensed beds by the lesser of ten (10) beds or ten
percent (10%) of its licensed capacity no more frequently than one (1) time every
three (3) years without obtaining a certificate of need. The nursing home shall
provide written notice of the increase in beds to the commission on forms
provided by the commission prior to the request for licensing by the board for
licensing healthcare facilities.
(2) For new nursing homes, the ten-bed or ten-percent increase cannot
be requested until one (1) year after the date all of the new beds were initially
licensed.
(3) When determining projected county nursing home bed need for
certificate of need applications, all notices filed with the commission pursuant to
subdivision (h)(1) must be considered with the total of licensed nursing home
beds, plus the number of beds from approved certificates of need, but yet
unlicensed.
(i)
(1) This part does not require a certificate of need for actions in a county
that:
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(A) Is designated as an economically distressed eligible county by
the department of economic and community development pursuant to §
67-6-104, as updated annually; and
(B) Has no hospital that is actively licensed under this title located
within the county.
(2) A person that establishes a healthcare institution shall submit proof of
accreditation by an appropriate external peer-review organization for the service
or facility to the commission within two (2) years of the date of licensure of the
healthcare institution.
(j) No later than July 1, 2023, the commission shall implement and make
available for use by applicants an electronic certificate of need application system.
SECTION 6. Tennessee Code Annotated, Section 68-11-1609(c), is amended by
deleting the first sentence and substituting:
Activity authorized by a certificate of need must be completed within a period not
to exceed three (3) years for nursing home projects from the date of its issuance, and
after such time the certificate of need authorization expires.
SECTION 7. Tennessee Code Annotated, Section 68-11-1609(h), is amended by
deleting the language "The commission shall maintain" and substituting "Except as provided in
subdivision (h)(2), the commission shall maintain", designating the existing language as
subdivision (h)(1), and adding the following as subdivision (h)(2):
(2) On and after June 30, 2025, the commission shall only maintain continuing
oversight over a certificate of need issued to or approved for a healthcare institution as
that term is defined on June 30, 2025.
SECTION 8. Tennessee Code Annotated, Section 68-11-1609(i)(1)(B), is amended by
deleting the subdivision.
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SECTION 9. Tennessee Code Annotated, Section 68-11-1626, is amended by deleting
the section and substituting:
(a) The commission may renew a license for a hospital upon application by the
party seeking to establish the hospital and finding that the hospital will operate in a
manner that is substantially similar to the manner authorized under the previous
hospital's license at the time of the previous hospital's closure, if:
(1) The hospital was previously licensed under this title or another
hospital was previously licensed under this title at the proposed location;
(2) The hospital is located in a county:
(A) Designated by the commission of economic and community
development as a tier 2, tier 3, or tier 4 enhancement county pursuant to
§ 67-4-2109; or
(B) With a population less than forty-nine thousand (49,000),
according to the 2010 federal census or a subsequent census;
(3) The last date of operations at the hospital, the hospital site service
area, or proposed hospital site service area was no more than fifteen (15) years
prior to the date on which the party seeking to establish the hospital submits
information to the commission pursuant to subsection (b); and
(4) The party seeking to establish the hospital applies for a certificate of
need from the agency within twelve (12) months of the date on which the party
submits information to the commission pursuant to this section.
(b) The commission shall review and make a determination on an application
submitted pursuant to subsection (a) and notify the applicant in writing of the
determination within sixty (60) days of the date the applicant submits a completed
application to the commission. If the commission's determination is to deny the
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application, then the commission must also provide to the applicant a written explanation
detailing the reasons for the denial.
SECTION 10. Tennessee Code Annotated, Title 68, Chapter 11, Part 16, is amended
by adding the following as a new section:
This part does not apply to an entity that, on or after June 30, 2025, is not a
healthcare institution as defined in this part.
SECTION 11. Tennessee Code Annotated, Section 34-6-201(4), is amended by
deleting the subdivision and substituting:
(4) "Health care institution" means a facility as defined in § 68-11-201;
SECTION 12. Tennessee Code Annotated, Section 42-8-101(1), is amended by
deleting the language "health care institution as defined in § 68-11-1602" and substituting
"facility as defined in § 68-11-201".
SECTION 13. Tennessee Code Annotated, Section 63-6-204(l)(1)(A)(iii), is amended by
deleting the subdivision.
SECTION 14. Tennessee Code Annotated, Section 63-6-601(2), is amended by
deleting the subdivision and substituting:
(2) "Health care facility" means and includes any real property or equipment of a
facility as that term is defined in § 68-11-201; and
SECTION 15. Tennessee Code Annotated, Section 68-11-201(40)(A), is amended by
deleting the language "and for which a certificate of need is required by this chapter".
SECTION 16. Tennessee Code Annotated, Section 68-11-202(e)(1)(A), is amended by
deleting the language "pursuant to its certificate of need authority or".
SECTION 17. Tennessee Code Annotated, Section 68-11-202(e)(1)(B), is amended by
deleting the language "its certificate of need or".
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SECTION 18. Tennessee Code Annotated, Section 68-11-205(g)(1)(A)(iii), is amended
by deleting the subdivision.
SECTION 19. Tennessee Code Annotated, Section 68-11-206(c), is amended by
deleting the subsection.
SECTION 20. Tennessee Code Annotated, Section 68-11-277(c)(7), is amended by
deleting the language "§ 68-11-1607(a)(4)" and substituting "§ 68-11-1607(a)(3)".
SECTION 21. Tennessee Code Annotated, Section 68-11-1802(a)(8), is amended by
deleting the subdivision and substituting:
(8) "Health care institution" means a facility as defined in § 68-11-201;
SECTION 22. Section 1 of this act takes effect upon becoming a law, the public welfare
requiring it. The remainder of this act takes effect June 30, 2025, the public welfare requiring it.