| 2026 Tennessee Legislative Session Recap
Tennessee ended the 2026 session with several major healthcare bills becoming law. Lawmakers passed the FY 2026-27 appropriations bill, maintained rural health funding, extended the Health Facilities Commission, and approved key legislation on Certificate of Need, COPA, hospital financing, and peer review privilege. HCA Healthcare is providing this session update to keep colleagues informed on key legislative developments that may affect care and access in the communities we serve. Budget and Rural Health Funding Budget decisions shaped the direction of the session. Governor Bill Lee proposed a $57.9 billion budget, and lawmakers ultimately approved a $58.3 billion spending plan, which includes key healthcare spending:
Rural health funding remained a major budget priority, though the final allocation shifted during the session. The Governor’s original budget included $125 million for Rural Health Transformation Resiliency Grants and $4.4 million for the Rural Health Care Training Program. A March administration amendment reduced the resiliency grant line by $20.6 million and, ultimately, was partially replaced with a TennCare Rural Health Clinics item funded with $20.6 million in shared savings and $36 million in federal funds. Certificate of Need One of the most significant healthcare outcomes of the 2026 session was final passage of Tennessee’s Certificate of Need (CON) legislation, SB 1369 and its companion HB 819. The measure represents a major repeal of Tennessee’s CON framework, which has governed healthcare facility development for more than five decades. The legislation removes CON requirements for acute care hospitals beginning July 1, 2030, and for satellite emergency departments and cardiac catheterization services beginning July 1, 2028. These services will instead be licensed by the Health Facilities Commission (HFC), with new standards for newly licensed acute care hospitals, including comparable TennCare participation and charity care requirements. SB 1369 was signed by the governor on May 5. Thank you to our HCA Healthcare colleagues for using your voices to advocate for better access to care for Tennessee patients. Your outreach made a real difference, giving providers the ability to expand into the communities that need them most. We’re proud to have such engaged and passionate colleagues across our HCA Healthcare family.
Separately, SB 1522/HB 1580 extended the HFC through June 30, 2030, preserving the state licensing and oversight body that will play a central role as CON legislation shifts certain hospital services to HFC licensure. Governor Lee signed SB 1522 into law on April 1, and it took effect the same day. COPA Reform Lawmakers also approved SB 2414/HB 2278, legislation that will allow Tennessee’s Certificate of Public Advantage (COPA) covering Ballad Health to expire. COPA is the state-supervised framework that allowed the 2018 merger of two Tennessee hospital systems to create Ballad Health, despite federal antitrust concerns, which permitted hospital consolidation under state oversight in exchange for enforceable commitments related to quality, access, and other public-benefit goals. Under SB 2414/HB2278, the COPA covering Ballad Health will expire on June 30, 2028. Pricing restrictions will remain in place until five years after that date or until a new inpatient acute care hospital opens in the area, whichever happens first. After COPA ends, a new acute care hospital in the same area will not need a Certificate of Need to be built. Governor Lee signed SB 2414 on May 5 and it became effective on the same day. Hospital Financing and Provider Operations Hospital financing remained one of the session’s clearest priorities. HB 1867/SB 1939 passed as the Annual Coverage Assessment Act of 2026. The legislation imposes an annual coverage assessment on covered hospitals for FY 2026-2027, with the total aggregate assessment equal to 6 percent of the federally recognized annual coverage assessment base. The assessment is not effective unless TennCare receives CMS approval confirming the assessment as a permissible revenue source and approval for the full amount of directed payments to hospitals. HB 1867 passed both chambers and was signed by the governor on May 19. The law will take effect on July 1. Provider operations also advanced through HB 2259/SB 2413. The measure strengthens confidentiality protections for quality improvement committee materials and allows healthcare providers and organizations to engage in open discussions with patients or families following adverse healthcare incidents within a protected statutory framework. Gov. Lee signed HB 2259 on May 19 and it became effective on the same day. |
2026 Tennessee Legislative Session Recap
Posted in Tennessee
