Tennessee law lets hospitals compete, putting patients first

Nashville, Tennessee; May 6, 2026: Tennessee Gov. Bill Lee signed legislation today eliminating certificate of need requirements for new acute care hospitals, satellite emergency departments, and cardiac catheterization services — a win for patients and healthcare providers who have long been blocked from entering the market by anticompetitive government red tape.

“Certificate of need laws have nothing to do with patient safety and everything to do with protecting entrenched hospital systems from competition,” said Kileen Lindgren, senior state policy manager with Pacific Legal Foundation. “Tennessee’s reform is a victory for every patient who deserves access to more providers, lower costs, and better care.”

Tennessee long has required hospitals to obtain government permission to open or expand, forcing medical providers to prove to bureaucrats that a “need” exists for their services. In practice, existing hospital systems dominate that approval process and routinely use it to block competitors. The new law removes CON requirements for acute care hospitals — defined as facilities focused on patients with average stays of 25 days or less — as well as satellite emergency departments and cardiac catheterization services. That means entrepreneurs and healthcare providers can now open facilities and offer services based on patient demand, not government permission.

Pacific Legal Foundation is working to advance certificate of need reform across the country and applauds Tennessee’s CON reform as a model for states still stifling healthcare competition.