Tennessee Ends Certificate-of-Need Review for Cath Labs and Satellite EDs, Replacing It With Licensure

Tennessee enacted SB1369/HB0819, which BillTrack50’s legislative tracker record for TN SB1369 lists as signed May 18, 2026. The law ends certificate-of-need (CON) review for satellite emergency departments (EDs) and cardiac catheterization services on July 1, 2028, and for acute-care hospitals on July 1, 2030. Once those dates pass, a system that wants to open a cath lab or a freestanding ED in Tennessee won’t have to show the state that the community needs one. It will need a license.

That shifts who decides where capacity goes, a question that matters to cath lab teams, emergency department leaders and the finance offices that plan around competitors. Need-based approval was a checkpoint before a new facility opened. Licensure is a different checkpoint, with different conditions.

The larger stakes sit in Washington. State Sen. Bo Watson (R), the bill’s Senate sponsor, pointed to incentives in the Rural Health Transformation Program (RHTP), a $50 billion program created under the One Big Beautiful Bill Act (OBBBA), according to HFMA’s May 5 report, “States overhaul certificate-of-need laws”. Grant size under the program depends partly on a state’s CON policy. One reading of the Tennessee law, then, is that federal grant design is reshaping state market rules for hospitals, freestanding EDs and cath labs.

What SB1369/HB0819 changes for cath labs, satellite EDs and hospitals

The law replaces need-based approval with licensure for three service categories, according to the law firm Bass, Berry & Sims in its “2026 Legislative Recap – 114th Tennessee General Assembly, Second Session,” posted on Legal500. Satellite emergency departments and cardiac catheterization services come first, on July 1, 2028. Acute-care hospitals follow on July 1, 2030. HFMA, which agrees on the dates, said CON ends in 2030 for “most” acute-care hospitals. The companion bill, HB0819, became Public Chapter 887, according to BillTrack50.

Licensure comes with conditions. Hospitals licensed under the new rules must participate in Medicaid, which Tennessee runs as TennCare, and provide charity care “comparable to similarly situated acute care hospitals,” according to HFMA, which said it was quoting the bill.

The federal grant incentive behind Tennessee’s CON changes

Tennessee isn’t acting alone. It’s one of 17 states that pledged CON reforms in their RHTP applications, according to HFMA, and states that don’t follow through risk clawbacks. For context, 35 states plus the District of Columbia run CON programs, a count HFMA attributed to the National Conference of State Legislatures.

Watson’s comments and Tennessee’s pledge both tie the state’s CON changes to RHTP incentives. Whether any clawbacks have been enforced against states that pledged and didn’t deliver remains an open question.

Tennessee hospitals split, and a senator’s doubts about rural benefit

Legislators said hospitals were divided on the bill, HFMA reported. Lacey Blair, vice president of state government affairs at the Tennessee Hospital Association, described the association as “neutral” at a March 18 hearing of the Senate Health and Welfare Committee.

Repeal also has an industry advocate outside the statehouse. Sam Hazen, CEO of HCA Healthcare, has pushed for CON repeal and criticized CON laws in testimony at an April 28 congressional hearing, according to HFMA.

State Sen. Joey Hensley (R) doubted that repeal would help rural hospitals, HFMA reported. The incentive linking RHTP grants to CON policy comes from a rural health program, which makes that question relevant to the law’s stated context. For more on rural hospital finances, see our coverage of an American Hospital Association report on rural hospital margins.

What the TennCare and charity care conditions leave open

The phrase “comparable to similarly situated acute care hospitals” raises practical questions. Who defines the comparison group? How is charity care measured, and who audits it? What happens to a licensed facility that falls short?

The conditions as HFMA reported them attach to hospitals. Whether comparable obligations apply to a standalone satellite ED or a cath service is an open question. For those services, CON review ends while licensure remains.

What July 1, 2028, will start to show

For cardiovascular and emergency departments, the practical test is where new cath capacity and freestanding EDs open once need review ends, who staffs them, and how the TennCare and charity care conditions are applied in practice.

About the sources: The signing date, the Public Chapter 887 designation and the bill history, including introduction on February 6, 2025, come from BillTrack50, a third-party tracker built on LegiScan data, which lists 10 sponsors. HFMA’s May 5 report and the Bass, Berry & Sims recap of May 6 were published before the May 18 signing, so they describe the bill’s passage and contents rather than its enactment.