HEALTHCARE INSTITUTION DEFINED
This bill narrows the definition of a "healthcare institution" when used in relation to the Tennessee health services and planning act of 2024. Under present law, a "hospital institution" includes a hospital, an ambulatory surgical center, an outpatient diagnostic center, and a rehabilitation facility. This bill excludes these terms from the definition. This bill, instead, requires that a nursing home, intellectual disability institutional habilitation facility, home care organization, residential hospice, and nonresidential substitution-based treatment for opiate addiction be included in the definition.
CERTIFICATE OF NEED - HEALTHCARE FACILITIES
Under present law, a person must not initiate certain healthcare services in this state, except after applying for and receiving a certificate of need for the action. The following healthcare services must not be initiated without first receiving a certificate of need: (i) neonatal intensive care unit, (ii) open heart surgery, (iii) organ transplantation; (iv) cardiac catheterization, (v) linear accelerator, and (vi) the burn unit. This bill requires that these services be removed from the list of healthcare services that cannot be initiated without a certificate of need.
This bill provides that the services of (i) home health, (ii) hospice, or (iii) opiate addiction treatment must not be initiated, except after applying for and receiving a certificate.
CERTIFICATE OF NEED - RELOCATION
Under present law, a person must not change the location of existing or certified healthcare facilities and institutions providing healthcare services, except after applying for and receiving a certificate of need for the action. However, the executive director of the health facilities commission may issue an exemption for the relocation of existing healthcare institutions and approved services if the executive director determines the following:
(i) At least 95 percent of patients to be served are reasonably expected to reside in the same zip codes as the existing patient population;
(ii) The relocation will not reduce access to consumers, particularly those in underserved communities; those who are uninsured or underinsured, women and racial and ethnic minorities, Tenncare or Medicaid recipients, and low-income groups; and
(iii) The payor mix will not include an increase in commercial insurance.
This bill deletes present law and, instead, prohibits a person from changing the location of an existing or certified (i) health care institution, or a facility that provides healthcare services, including (ii) home health, (iii) hospice, or (v) opiate addiction treatment provided through a nonresidential substitution-based treatment center for opiate addiction, without first receiving a certificate of need.
Additionally, this bill prohibits a person from changing the relocation of the principal office of a home health agency or hospice unless within its licensed service area a certificate of need is not required.
"Person," as used in this bill, means an individual, a trust or an estate, a firm, a partnership, an association, a stockholder, a joint venture, a corporation or other form of business organization.
EXEMPTION FOR CERTIFICATE OF NEED TO RELOCATE
Under present law, the executive director must notify the health facilities commission ("the commission") of an exemption granted pursuant to a change in the location of existing or certified facilities providing healthcare services and healthcare institutions. However, the executive director may issue an exemption for the relocation of existing healthcare at the next regularly scheduled commission meeting. An exemption granted or denied by the executive director is subject to commission review in the same manner as described. This bill deletes these provisions.
CERTIFICATE OF NEED - MAGNETIC RESONANCE SERVICES
Under present law, a person must not initiate magnetic resonance imaging services; or increase the number of magnetic resonance imaging machines, except for replacing or decommissioning an existing machine, in any county, except for Williamson, Rutherford, Hamilton, Knox, Davidson, and Shelby, except after applying for and receiving a certificate of need for the action. This bill deletes these provisions.
This bill prohibits a person from initiating magnetic resonance imaging services or increasing the number of magnetic resonance imaging machines, except for replacing or decommissioning an existing machine, in any county, except for Blount, Washington, Williamson, Sumner, Montgomery, Sullivan, Rutherford, Hamilton, Knox, Davidson, and Shelby, except after applying for and receiving a certificate of need for the action.
CERTIFICATE OF NEED - TOMOGRAPHY
Under present law, a person must not initiate positron emission tomography without a certificate of need in any county, except for Williamson, Rutherford, Hamilton, Knox, Davidson, and Shelby. This bill deletes this provision and, instead, prohibits a person from initiating positron emission tomography without a certificate of need in any county , except for Blount, Washington, Williamson, Sumner, Montgomery, Sullivan, Rutherford, Hamilton, Knox, Davidson, and Shelby.
This bill requires a provider of positron emission tomography to become accredited by the american college of radiology and provide to the health facilities commission proof of the accreditation within two years of the date of licensure or initiation of services. A provider of positron emission tomography that fails to comply with the accreditation requirement is subject to licensure sanction as a violation of the rules or minimum standards required.
CERTIFICATE OF NEED - OUTPATIENT DIAGNOSTIC CENTER
Under present law, within two years after the date of receiving a certificate of need, an outpatient diagnostic center must become accredited by the american college of radiology in the modalities provided by that facility as a condition of receiving the certificate of need. This bill deletes this provision.
This bill requires, within two years after the date of initiation of service, an outpatient diagnostic center to become accredited by the american college of radiology in the modalities provided by that facility as a condition of receiving the certificate of need.
This bill also requires that if an outpatient diagnostic center provides magnetic resonance imaging services they must file with the commission an annual report no later than 30 days following the end of each state fiscal year information regarding how their patients paid for their services. Failure to comply with this requirement may subject the outpatient diagnostic center with potential licensure sanctioning.
CERTIFICATE OF NEED - HOME CARE ORGANIZATIONS
Under present law, a home care organization may only initiate hospice services after applying for and receiving a certificate of need for providing hospice services. This bill requires that a certificate of need is not required to establish a home care organization providing home health hospice services to patients younger than 18.
This bill also requires that a home care organization performing services without a certificate of need must submit proof of accreditation by an appropriate external peer-review organization to the commission within two years of the date of initiation of service or licensure of the home care organization, and if the organization fails to do so, it will be subjected to licensure sanctioning.
This bill provides that a certificate of need is not required for a home care organization to operate a nonresidential substitution-based treatment center for opiate addiction if the treatment center is located on the same campus as an operating hospital and the hospital is properly licensed to operate. Failure of the organization to comply with the proper location and licensing requirements will subject it to potential licensure sanctioning.
As used in this bill, a "home care organization" means an entity licensed as such by the commission that is staffed and organized to provide "home health services" or "hospice services," to patients in either the patient's regular or temporary place of residence.
CERTIFICATE OF NEED - HOSPITAL ESTABLISHMENT
Under present law, a certificate of need is not required for the establishment of a hospital if (i) the hospital was previously licensed or another hospital was licensed at the same proposed location, (ii), the hospital is located in a rural county, (iii) the last date of operations of the hospital was no more than 15 years prior to the date establishment is being sought and this information is submitted to the commission , and (v) the party seeking to establish the hospital applies for the certificate within 12 months of submitting the information in (iii). This bill deletes this provision.
HOSPITAL LICENSURE
This bill prohibits the commission from licensing or renewing the existing license of a hospital if the following criteria is met:
(1) The diagnosis-related groups for 50 percent or more of the discharges from the hospital, in the most recent year for which data is available to the commission, are for diagnosis, care, and treatment of patients who have certain cardiac, orthopedic, or cancer-related diseases and disorders; or
(2) The hospital restricts its medical and surgical services to primarily or exclusively cardiac, orthopedic, surgical, or oncology specialties.
This bill prohibits a person from operating a freestanding emergency department that is not an off-campus emergency department of a hospital licensed by the commission. However, this requirement does not apply to a facility designated by the commission as a rural emergency hospital.
THE HEALTH FACILITIES COMMISION'S DUTIES
Under present law, the commission follows certain procedures when considering whether or not an entity should be granted or denied a certificate of need. This bill provides that this provision does not apply to an entity that, on or after July 1, 2024, is not a healthcare institution.
Under present law, the commission, must, at least annually, review progress on a project covered by an issued certificate of need, and may require a showing by the holder of the certificate of substantial and timely progress to implement the project. If, in the opinion of the executive director of the commission, progress is lacking, then the executive director may present a petition for revocation of the certificate of need for the commission's consideration. The commission may revoke the certificate of need based upon a finding that the holder has not proceeded to implement the project in a timely manner. This bill provides that this present law does not apply to an entity that, on or after July 1, 2024, is not a healthcare institution.
PENALTIES FOR CERTIFICATE OF NEED VIOLATION
Under present law, the commission has the power and authority, after notice and an opportunity for a hearing, to impose a civil monetary penalty against a person who performs, offers to perform, or holds such person out as performing an activity for which a certificate of need is required under the Tennessee health services and planning act, without first obtaining a valid certificate of need. This bill provides that civil monetary penalties do not apply to an entity that, on or after July 1, 2024, is not a healthcare institution.
This bill requires the commission to develop rule measures for assessing quality for entities that have received a certificate of need under the Tennessee health services and planning act, after July 1, 2024. The entity is subject to civil penalties under the above paragraph, if the commission determines that it has failed to meet a quality measure imposed as a condition for a certificate of need by the commission.
REVOCATION OF CERTIFICATE OF NEED
Under present law, in addition to other grounds for revocation provided by other statutes, rule of law, or equity, the commission has the power to revoke a certificate of need whenever the following has occurred:
(i) The holder of a certificate of need has not made substantial and timely progress toward the completion of the project or acquisition of the equipment;
(ii) The acquisition or project as described in the person's application has been changed or altered in a manner that significantly deviates from the acquisition or project approved by the commission when the certificate of need was granted;
(iii) The decision to issue a certificate of need was based, in whole or in part, on information or data in the application which was false, incorrect, or misleading, whether intentional or not;
(iv) The holder of the certificate of need has committed fraud in obtaining the certificate of need or has committed fraud upon the commission after the certificate of need was issued; or
(v) The violation of a condition placed upon a certificate of need by the commission.
This bill provides that the grounds for revocation only apply to entities that, on or after July 1, 2024, are defined as healthcare institutions.
TRANSFERRING A CERTIFICATE OF NEED
Under present law, the transfer of a certificate of need renders it and all rights under it void. As used in such provision, "transfer" means the sale, assignment, lease, conveyance, purchase, grant, donation, gift, or other direct or indirect transfer of any nature whatsoever of a certificate of need. However, there are certain instance when the transfer of a certificate is not prohibited. This bill provides that the certificate of need transfer rules do not apply to an entity that, on or after July 1, 2024, is not a healthcare institution.

Statutes affected:
Introduced: 68-11-1601, 68-11-1602(9), 68-11-1602, 68-11-1602(10), 68-11-1607(a), 68-11-1607, 68-11-1607(j)(3), 68-11-1607(l), 68-11-1607(m)(2), 68-11-1607(o)(1), 68-11-1607(o)(2), 68-11-1607(p)(2), 68-11-1607(q), 68-11-1607(r), 68-11-1607(s), 68-11-1607(u), 68-11-1607(v), 68-11-1609(c), 68-11-1609, 68-11-1611, 68-11-1616, 68-11-1617, 68-11-1618, 68-11-1625(a), 68-11-1625, 68-11-1625(c), 68-11-1626