Certificate-of-need laws, which vary significantly state-to-state, have come under recent scrutiny as states look to expand market competition and meet new requirements for federal funding.
Here are three recent CON debates and what their outcome could mean for the ASC industry at large:
1. Tennessee’s delayed CON repeal: Legislators in Tennessee passed legislation to repeal it’s certificate-of-need requirements April 16 after several weeks of delays and pressure from the Federal Trade Commission to move forward with the process.
Tennessee’s bid for funding as a part of the federal Rural Health Transformation program has been hanging in the balance of CON reform as CMS and President Donald Trump’s administration have tied some of that funding to certain policies at the state level, including the elimination of CON, according to a summary of the RHT published by the American Medical Association in September.
The law will have a significant impact on the state’s acute care hospitals, the Tennessee Lookout reported April 21. Tennessee enacted partial CON reform in 2024, removing restrictions on satellite emergency rooms in counties with existing hospitals. Over the last 15 years, the state has seen at least 14 of its rural hospitals close, according to the report, with many others reducing services.
The situation in Tennessee may serve as a cautionary tale for states wrestling with CON reform in their legislatures, especially those with significant rural populations or those vying for RHT funding.
2. North Carolina’s ongoing legal battle over CON: A six-year-old legal conflict over the state’’ CON laws was revived April 1 by an amicus curiae brief filed on behalf of Jay Singleton, DO, an ophthalmologist, and the John Locke Foundation, a free-market think tank based in Raleigh, N.C.
Dr. Singleton, owner of Singleton Vision Center in New Bern, N.C., originally filed a lawsuit in April 2020, alleging that under current law, he can only perform an “incidental” amount of surgeries, as state planners believed they had “no need” for his services around New Bern.
Dr. Singleton’s case was first dismissed June 11, 2021, in Wake County Superior Court. On Oct. 18, 2024, the state Supreme Court issued an unsigned, unanimous, four-page ruling that gave the case new life while leaving the question of CON laws’ constitutionality open. Dr. Singleton takes his case back to the high court this week.
In December 2025, a trial court upheld the CON laws, rejecting Dr. Singleton’s challenge. In the new filings, the foundation asks the state Supreme Court to use Dr. Singleton’s case to address the issues of “tiers of scrutiny” in dealings with constitutional questions in the state’s courts.
The outcome of Dr. Singleton’s case could have significant implications for the ASC industry in North Carolina and potentially beyond, as a ruling against CON laws would lower barriers for physicians looking to develop or expand outpatient surgical facilities. If the North Carolina Supreme Court uses this case to establish a higher constitutional scrutiny standard for CON regulations, it could embolden similar legal challenges in other CON states — opening new markets for ASC development and independent physician ownership.
3. Michigan weighs loosening CON: Michigan lawmakers are weighing legislation that would eliminate hospital outpatient facility fees and loosen certificate-of-need requirements for imaging services. House Bill 5709 would eliminate CON requirements for certain imaging services at outpatient centers. The MHA said the change could drive up costs and reduce access in rural and underserved areas by fragmenting service delivery.
Michigan’s push to eliminate CON requirements for imaging services may reflect a broader legislative trend toward deregulating outpatient care, which could make it easier for ASCs to add imaging capabilities without lengthy approval processes. If passed, the bill could serve as a model for similar reforms in other CON states, though hospital industry opposition may complicate its path forward.
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