Health Facilities Commission reports surge in complaints, requests $4M for licensure system and additional staff

At a Finance, Ways, and Means budget hearing, Logan Grant, executive director of the Tennessee Health Facilities Commission, told legislators the commission received a marked increase in complaint activity tied to federal changes and is seeking $4,000,000 nonrecurring to fund a new licensure system and additional staff to handle workload and reporting.

Grant said the commission is “presently piggybacking off of the Department of Health’s large system,” but that the Department of Health’s new system would not include functionality needed to regulate licensed health care facilities. He said the governor’s office funded two requests: the $4,000,000 for a new licensure system and positions for accounting support that will be housed in the Division of Accounts at the Department of Finance and Administration to help the commission draw down federal funds.

Grant told the committee the commission requested additional resources that were not included in the governor’s recommended budget: four positions for a centralized high priority complaint unit to investigate urgent complaints and reduce disruption to recertification surveys; additional licensure staff including plans reviewers and life-safety inspectors; more legal support (litigation attorneys are handling roughly 60 cases apiece); and an infection-prevention specialist to help providers prepare for outbreaks.

He said the commission provided a 1% operations cut as requested by the governor’s office, which amounted to about $153,000. Grant also described a workload increase he tied to federal guidance: "Presently, it's about a 54.2% increase from 2022," in quarterly complaints, which he and staff attributed largely to Chapter 5 changes in the Centers for Medicare & Medicaid Services State Operations Manual that increased facility reporting requirements.

On Certificate of Need (CON) reform implementation, Grant said the commission expects new regulatory activity beginning Dec. 1, when NICUs, burn units and PET/MRI services will be subject to revised requirements. He said the advisory groups recommended third‑party reverification for NICUs (unique among the services) and recommended that burn units obtain American Burn Association accreditation within five years of licensure.

Members questioned whether the commission can meet federal survey obligations with the current staffing and funding. Grant described the agency as “very strained,” saying federal funding has not increased commensurately with workload and that surveyors must be licensed health professionals, which raises salary pressure. He said the federal funding cap is "I believe, at $9.09 and a quarter million dollars" (as stated) and that the state has had to absorb rising personnel costs.

Why it matters: increased complaint reporting, new CON responsibilities and a backlog of recertification surveys raise questions about the commission’s capacity to inspect facilities and enforce standards. The commission asked the committee for additional resources to address those gaps ahead of expanded regulatory responsibilities for NICUs and other services.

The committee heard multiple follow-up questions but did not record a formal vote; members asked for more data on complaint types, annual inspection counts and staffing metrics.