Tennessee's Certificate Of Need New Process Becomes Effective Friday

  • Thursday, June 30, 2016

A new law modernizing Tennessee Certificate of Need program to help reduce the cost of healthcare and provide greater access to citizens is among a wide variety of laws that are set to become effective on Friday.  The measure, sponsored by Senator Todd Gardenhire (R-Chattanooga) and co-sponsored by Senate Speaker Pro Tempore Bo Watson (R-Hixson), makes changes, including removing several services from requiring certificates of need, as well as adding flexibility to the way that hospitals and physicians groups operate in the state.  

“This legislation makes several reforms that will reduce the cost of healthcare and provide greater access to our citizens,” said Senator Gardenhire, who chaired a study committee last summer which looked into the CON process.  “The changes we have made in this legislation are reasonable, logical and key to removing costs from government intrusion that provides no benefit to our fellow citizens.” 

“It is important that we keep up with modernizing the CON process to better reflect the current environment in healthcare,” added Senator Watson.  “It will help in our efforts to curtail the rising cost of healthcare, as well as expand access to care.” 

CON is a legal document required in some states, including Tennessee, before proposed acquisitions, expansions or creations of healthcare facilities are allowed.  In short, if a hospital or healthcare facility wishes to expand its capacity, whether that is the number of hospital beds it makes available or the types of imaging it can conduct, the facility must apply to a state board for permission through the CON process.  The state’s CON program started in 1974 as a result of the passage of the federal “Health Planning and Resources Development Act,” which made federal funding contingent on having a process in place.  That requirement was lifted in 1987 and, while 14 states discontinued their programs, Tennessee decided to continue the CON process. 

Key reforms in the new law which takes effect Friday include: 

Eliminating the CON for birthing centers, lithotripsy, rehabilitation services and hospital-based alcohol and drug treatment for adolescents; 

Eliminating the CON for discontinuation of obstetrician services and critical access hospital closures; 

Eliminating the CON requirement for important capital investments for modification or renovating existing health care institutions, as well as investments in medical equipment; and, 

Recognizes the healthcare differences faced by rural communities by only eliminating the CON for initiation of MRI services or purchasing of additional MRI machines for counties having a population greater than 250,000 (Hamilton, Davidson, Shelby, Rutherford and Knox), except for those serving patients less than 14 years of age. 

Another part of the reform includes requiring entities that contest the CON application to pay a 25 percent examination fee prior to accepting the contest.  If the application is denied, the 25 percent will be refunded to the applicant. 

“I am pleased this legislation will now be enacted and believe it helps in providing a more efficient and effective healthcare system in Tennessee,” added Senator Gardenhire. 

In addition, Senator Gardenhire’s legislation, which extends the statute of limitations for aggravated statutory rape to 15 years after the victim turns 18 years of age, will also take effect on Friday.  

"This extends the time in which a person has to report, as many of these victims suffer tremendous psychological trauma and need more time before coming forward.  This law ensures that victims have that needed time,” said Senator Gardenhire.

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