The Trump administration is tying part of the $50 billion Rural Health Transformation Program to whether states repeal or loosen certificate-of-need laws, according to a KFF Health News report published by CBS News Oct. 19.
CMS has told states it would score funding applications higher if they rolled back CON laws, which require providers to prove community need before building or expanding healthcare facilities. In its notice to states, CMS called the laws “an additional expense and burden on rural facilities.” The five-year program was created through the One Big Beautiful Bill Act.
Six states indicated in their applications that they would revisit their CON laws. Alaska, Connecticut, Delaware, Iowa and Mississippi are among those weighing changes.
Tennessee has moved furthest. In April, lawmakers passed HB0819 in a bipartisan vote, phasing out most of the state’s remaining CON rules over four years after years of stalled repeal efforts. South Carolina, which voted in 2023 to end most of its CON rules, will stop requiring applications for new hospital construction or expansion in January, keeping them only for nursing homes.
The shift has drawn pushback. Martin Chaney, CEO of Maury Regional Health in rural Middle Tennessee, argued repeal would lead to “cherry-picking” and widen gaps in rural access to care, according to the report.
Maureen Hensley-Quinn, a researcher at the National Academy for State Health Policy, said states should carefully weigh the trade-offs of the “voluntary” federal policy. Ms. Hensley-Quinn also warned that repeal could leave states with less insight into health system finances, ownership and private equity deals.
More than 30 states and Washington, D.C., enforce some form of CON law, according to the National Conference of State Legislatures.
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