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House panel advances CON changes, adds freestanding EDs and cardiac caths to licensure amid rural hospital concerns
Summary
The House Health Committee voted to advance HB 819 as amended, removing select acute-care services from the certificate-of-need process and moving freestanding emergency departments and cardiac catheterization services to a licensure pathway with a 2027 effective date; hospital representatives warned the change could threaten rural safety-net hospitals.
The House Health Committee on Aug. 1 advanced House Bill 819 as amended, a measure that removes certain services from the state's certificate-of-need (CON) process and phases freestanding emergency departments (FSEDs) and cardiac catheterization services into licensure in 2027. The committee adopted an amendment to correct effective dates and later approved a late-filed amendment to add FSEDs and cardiac caths to the next licensure phase. "It also sets up a licensure process much like we did for open heart surgery and, NICU and burn units," a sponsor told the committee.
Hospital representatives and rural health leaders told the committee the change risks undermining the internal subsidy model that supports unprofitable but essential services. "Stripping away C.O.N. protections leaves us unable to operate a safety net provider," Tina Prescott, president and CEO of West Tennessee Healthcare, said in testimony describing a system that subsidizes emergency care, obstetrics and behavioral-health services with higher-margin outpatient work. Scott Tongate, CEO of Macon Community Hospital, warned that losing a critical access designation — tied to a 35-mile radius — can be fatal: "If a critical access hospital in Tennessee loses its designation, it will close within a year. That's not hyperbole. That is facts."
Committee members asked technical questions about radius rules, accreditation and CMS certification. The sponsor said the 35-mile radius is defined by federal statute and that the amendment requires FSEDs and cardiac cath sites to be hospital-affiliated. Legal counsel clarified that the bill, as drafted, defines "acute care hospital" for the bill's purposes and that definition would be placed in statute if passed. The clerk reported the final committee vote as 23 ayes and 2 nays; HB 819 passed as amended and was referred to Finance, Ways and Means.
Supporters argued the changes reduce anachronistic regulatory barriers and allow market-driven capital allocation for community services. Opponents and some rural legislators said the bill could invite private entrants to "cherry-pick" profitable services and leave safety-net hospitals underfunded. The committee discussion included repeated exchanges on whether licensure plus accreditation/CMS oversight would sufficiently protect patients and rural capacity.
The bill now proceeds to the Finance, Ways and Means committee. Sponsors asked attorneys to fold the two adopted amendments into a single amendment for the next committee.
