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Executive Order waives certain Tennessee CON regulatory requirements

As of March 19, 2020, the requirement to receive a certificate of need (CON) prior to increasing bed capacity has been temporarily suspended by Tennessee Executive Order No. 15 (the “Order”). This suspension allows hospitals that would otherwise be subject to certificate of need requirements to temporarily increase their number of licensed hospital beds at any location or temporarily establish hospital and diagnostic services at any location, if necessary for the treatment of COVID-19 patients.

Under ordinary circumstances, Tennessee law prohibits a healthcare institution from increasing its total number of licensed beds without first obtaining a CON. (TCA § 68-11-1607(a)(3)(A)). Upon an occurrence of a justified emergency, however, Tennessee law allows a hospital to temporarily increase its bed capacity if the following protocol is followed:

  1. The hospital’s administrator notifies the Department of Health in writing within forty-eight (48) hours of exceeding its licensed bed capacity;
  2. The notification includes a description of the emergency, including details of: (a) why the bed capacity was exceeded; (b) the estimated length of time the bed capacity is expected to be exceeded; and (c) the number of admissions in excess of the facility’s licensed bed capacity; and
  3. When the hospital returns to its licensed capacity, it must notify the Department of Health in writing of the effective date of its return to compliance. (Tenn. Rules & Regs. § 1200-08-01-.05(23)).

In discussions with the Tennessee Department of Health (the “Department”) regarding licensure requirements related to adding beds pursuant to the Order, the Department has indicated that notice to the Department will be required. The Department has advised that it will be sending an email to all licensed hospitals concerning the CON suspension and process for adding beds.

This temporary suspension of CON requirements directly addresses the concerns of many providers who have urged the federal government to strengthen provider capacity and to provide appropriate sites of care for patients. In a joint letter to Congress, the American Hospital Association and other provider associations emphasized the need to remove regulatory restrictions that interfere with “modifying existing facilities in and around hospitals, quickly constructing temporary units where needed, making use of surplus government property, and increasing patient beds to prioritize critical patient needs.” By temporarily suspending this regulatory barrier, healthcare facilities will be better able to address the COVID-19 pandemic by increasing capacity as needed for patients that require inpatient care.

In continuing to respond to the COVID-19 outbreak, many states are preparing to deal with an anticipated – and drastic – influx of patients. California, New York and Washington are each accounting for this influx of patients by constructing new hospitals and healthcare facilities to provide additional bed capacity based on projected need. Tennessee Executive Order No. 15 may assist healthcare providers if similar measures are ultimately required in Tennessee.

Please continue to check back for additional updates as we receive additional information.

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