AN ACT to amend Tennessee Code Annotated, Title 33; Title 63 and Title 68, relative to health facility regulation.
SB2431 revises Tennessee’s health facility regulation framework, primarily by expanding and clarifying the Health Facilities Commission’s authority over licensure, certificate-of-need (CON) review, accreditation, inspections, and disciplinary procedures. The bill updates statutory definitions for specialized services and facilities, including burn units, neonatal intensive care units, MRI services, and PET services, and expressly lists those services among the facilities and modalities the commission may license and regulate.
A major portion of the bill addresses CON and licensure processes. It gives the commission authority to determine eligibility for critical access hospital designation under federal rural hospital rules, requires public notice and an objection process for proposed critical access hospitals, and tightens rules for relocations of healthcare facilities and institutions. It also imposes accreditation requirements for outpatient diagnostic centers and PET providers, allows non-diagnostic MRI and PET services to operate without licensure, authorizes the commission to charge applicants and licensees the actual and reasonable costs of site visits and disciplinary prosecutions, and permits the use of non-public discipline and screening panels in certain enforcement matters. The bill also extends the inspection timeline for nursing homes so that, by the end of 2028, the most recent inspection for each licensed nursing home must be within 15 months of December 30, 2028.
The bill’s impact on state law is to broaden and modernize the regulatory tools available to the Health Facilities Commission and the Department of Health, while also increasing procedural requirements for applicants and licensees. It amends multiple sections of Titles 68 and 33, changes data-release rules to require HIPAA-compliant limited-use data sets for CON applicants, and creates new standards for accreditation, relocation exemptions, and disciplinary cost recovery. It also directs the commission to promulgate emergency rules, making the act effective immediately for rulemaking purposes and otherwise on July 1, 2026.
The overall sentiment reflected in the voting history is strongly supportive. The bill passed both Senate committees unanimously and cleared the Senate floor by a wide margin, indicating broad agreement on the need to update health facility regulation and CON procedures. The final floor vote was 79-4, showing only limited opposition.
The main points of contention appear to center on the bill’s regulatory burden and enforcement powers, especially the new cost-shifting provisions, the expanded use of screening panels and non-public discipline, and the detailed conditions placed on relocations and accreditation. The public notice and objection process for critical access hospitals, as well as the commission’s expanded authority over eligibility and review, may also have been sensitive issues for hospitals and healthcare providers affected by CON oversight.
SB2431 amends Tennessee Code Annotated Titles 33, 63, and 68 to expand and refine the Health Facilities Commission’s authority over hospital and healthcare facility licensure, certificate-of-need review, accreditation, inspections, and disciplinary enforcement. It adds definitions and regulatory coverage for burn units, neonatal intensive care units, MRI, and PET services; modifies data-sharing rules for CON applicants; creates notice and objection procedures for critical access hospital proposals; imposes accreditation deadlines for outpatient diagnostic centers and PET providers; authorizes cost recovery for site visits and disciplinary actions; and adjusts inspection and relocation rules for certain facilities. The bill also requires emergency rulemaking and takes effect July 1, 2026, except for rule promulgation purposes.
The bill appears to have received broadly favorable treatment throughout the legislative process. It passed the Senate Health and Welfare Committee 9-0, the Senate Finance, Ways and Means Committee 11-0, and the Senate floor by a substantial margin, with only four no votes on final passage. That voting pattern suggests general support for updating and tightening health facility regulation, with limited opposition.
The most likely areas of disagreement are the bill’s expanded regulatory and enforcement authority, including mandatory accreditation requirements, the ability to charge applicants and licensees for site visits and disciplinary prosecutions, and the use of screening panels and non-public discipline. Healthcare providers and facilities subject to certificate-of-need review may also have concerns about the new notice, objection, and relocation rules, especially where they affect critical access hospital designation, facility moves, and market competition. The bill’s provisions on commission review and conflict-of-interest rules may also have drawn scrutiny from regulated entities and commission stakeholders.