Certificate of Need Basics

Legislative Policy:

It is the policy of the state that "the establishment and modification of health care institutions, facilities and services, shall be accomplished in a manner that is orderly, economical and consistent with the effective development of necessary and adequate means of providing for the health care of the people of Tennessee."

 

Organization:

The Tennessee Health Services and Development Agency is an independent agency consisting of:

  • Comptroller of the Treasury or his/her designee;
  • Director of TennCare or his/her designee;
  • Commissioner of the Department of Commerce and Insurance or his/her designee;
  • One (1) consumer representative appointed by the Speaker of the Senate;
  • One (1) consumer representative appointed by the Speaker of the House of Representatives; and
  • Six (6) members appointed by the Governor:
    • One (1) consumer representative;
    • One (1) person who has recent experience as an executive officer of a hospital or hospital system who may be appointed from lists of qualified persons submitted by interested health care groups including, but not limited to, the Tennessee Hospital Association;
    • One (1) representative of the nursing home industry who may be appointed from lists of qualified persons submitted by interested health care groups including, but not limited to, the Tennessee Health Care Association;
    • One (1) duly licensed physician who may be appointed from lists of qualified persons submitted by interested medical groups including, but not limited to, the Tennessee Medical Association;
    • One (1) representative of the home care industry who may be appointed from lists of qualified person submitted by interested home care groups including, but not limited to, the Tennessee Association of Home Care; and
    • One (1) representative of the ambulatory surgical treatment center industry.

 

Institutions that Require a Certificate of Need prior to Establishment, Licensure, or Certification:

  • Hospital;
  • Nursing Home;
  • Recuperation Center;
  • Ambulatory Surgical Treatment Center (ASTC);
  • Mental Health Hospital;
  • Intellectual Disability Institutional Habilitation Facility;
  • Home Care Organization (Home Health and Hospice);
  • Outpatient Diagnostic Center (ODC);
  • Rehabilitation Facility;
  • Residential Hospice; and
  • Nonresidential Substitution-based Treatment Center for Opiate Addiction.

 

Following Services That Require Certificate of Need Before Any Person Initiates:

  • Burn Unit;
  • Neonatal Intensive Care Unit;
  • Open Heart Surgery;
  • Positron Emission Tomography;
  • Organ Transplantation;
  • Home Health;
  • Psychiatric (Inpatient);
  • Pediatric (14 years or younger) Magnetic Resonance Imaging;
  • Magnetic Resonance Imaging in counties with populations less than 250,000;
  • Cardiac Catheterization;
  • Linear Accelerator
  • Hospice; and
  • Opiate Addiction Treatment (Provided through a facility licensed as a nonresidential substitution-based treatment center for opiate addiction).

 

Following Actions that Require a Certificate of Need:

  • Any change in the bed complement of a health care institution which:

     a)  Increases by one or more the total number of licensed beds;

     b)  Redistributes beds from acute to long term care;

     c)  Redistributes from any category to acute, rehabilitation, child and adolescent psychiatric, or adult psychiatric; and/or

     d)  Relocates beds to another facility or site.

  • Change in location or replacement of existing or certified facilities providing health care services or health care institutions.
  • Change of parent office of a home health or hospice agency from one county to another county.
  • One time every three  years, a hospital, rehabilitation facility, or mental health hospital may increase its total number of licensed beds in any bed category by 10% or less of its licensed capacity at any one campus over any period of one  year for any services or purposes it is licensed to perform without obtaining a certificate of need. The hospital, rehabilitation facility, or mental health hospital shall provide written notice of the increase in beds to the agency on forms provided by the agency prior to the request for licensing by the board for licensing healthcare facilities or the department of mental health and substance abuse services, whichever is appropriate.

    a) A hospital, rehabilitation facility, or mental health hospital shall not

         i) Increase its number of licensed beds for any service or purpose for which it is not licensed to provide; or

         ii) Redistribute beds within its bed complement to a different category.

  • Campus means structures and physical areas that have the same address and are immediately adjacent or strictly contiguous to the facility's or hospital's main buildings.

    a) For new hospitals, rehabilitation facilities, or mental health hospitals, the 10% increase cannot be requested until 1 year after the date all of  the new beds were initially licensed.

    b) When determining projected county hospital bed need for certificate of need applications, all notices filed with the agency pursuant  to subdivision (g)(1), with written confirmation from the board for licensing healthcare facilities or the department of mental health and  substance abuse services, whichever is appropriate, that a request and application for license has been received and a review has  been scheduled, shall be considered with the total of licensed hospital beds, plus the number of beds from approved certificate of need, but yet unlicensed.