When the 114th general assembly adjourned sine die in spring 2026, lawmakers left the Capitol after passing a major regulatory shift in the state’s healthcare policy. The recent signing of HB819/SB1369 has codified changes that commit the state to a phased rollback of a large portion of the Certificate of Need (CON) requirements. These changes include the phased removal of CONs for acute care hospitals, cardiac catheterization services, and satellite emergency departments.
To maximize the benefits of this competitive new landscape, Tennessee should pursue innovative policy opportunities, like the use of artificial intelligence (AI) in healthcare diagnostics and treatment, that better support providers and increase the quality of care. Dismantling significant CON requirements now gives providers the freedom to build and expand, while AI gives opportunities to assist in the providers’ capabilities, freeing up more time to focus on patients. These two policies should go hand in hand to lead Tennessee into a new era of affordable and accessible healthcare. While CON requirements have existed in healthcare for decades, AI has been around for nearly as long, though not nearly in as prevalent or powerful a form as it is today. Currently, nearly a third of all hospital systems in the country are paying for a commercial AI license, a number that will likely continue to grow. New and powerful AI tools are able to assist healthcare providers in a range of ways and can be especially beneficial to rural areas where provider shortages and finances are limited.
Research suggests CON laws lead to the rejection of one in five healthcare innovations in the state, resulting in as many as 63 fewer hospitals in Tennessee, with 25 being in rural areas. With the legislature’s recent changes to CON requirements, hospitals will be freer to build and expand facilities to meet the needs of Tennesseans. For example, the full repeal of CON requirements for satellite emergency departments after July 1, 2028, is a major opportunity for rural Tennesseans. Yet staffing rural or remote facilities with specialized providers will likely remain a challenge. AI-assisted care and diagnostics can be an immense help to these facilities. A Harvard study found AI could conduct triage in emergency rooms, recommend correct tests for diagnosis, and perform tasks to manage cases that matched or exceeded the ability of human physicians. For facilities unable to have specialized providers available 24/7, AI has the potential to assist in healthcare for patients without the need to wait or travel to where the specialized provider is physically located.
Tennessee should also reject the urge to regulate away the chance for innovation. Though AI has been integrated into healthcare in some form or fashion for over 60 years, the technology is rapidly changing. Any state-level policy regulating AI in healthcare in an attempt to protect patients would either be outdated before the ink dried on the page or worse, stifle innovation and harm patients who could have benefited from the technology. With Tennessee’s position as a regional leader and hub for healthcare, the state should look for ways to continue creating a welcoming policy environment for healthcare innovation. Instead of passing regulations on these technologies, the state should consider allowing for a regulatory sandbox—a controlled environment with the freedom to test and innovate—to allow healthcare and AI technologies to better serve Tennesseans. This is not a novel idea, with sandboxes successfully implemented in other states. Regulatory sandboxes allow policymakers to see real-world data for innovative technologies and can better inform policy while allowing for innovation to thrive.
The removal of CON requirements has the potential to offer more healthcare options and increased access to all Tennesseans, especially those in rural areas. Addressing provider shortages by welcoming the assistance of powerful technology like AI can provide all Tennesseans access to world-class medical care, no matter their location. In the same way that MRIs and CT scans were cutting-edge innovations that changed the game on early diagnosis and treatment, AI should be welcomed, not stifled by government red tape, as it has the potential to improve the lives of everyone in the Volunteer State.