Letter from Office of Policy Planning Director Brendan Chestnut et al. to Representative David Hawk Concerning Tennessee H.B. 2278/S.B. 2414 on the Expiration of Ballad Health COPA and H.B. 819/S.B. 1369 to Remove CON Requirements for Acute Care Hospitals

UNITED STATES OF AMERICA
Federal Trade Commission
WASHINGTON, D.C. 20580
Office of Policy Planning
April 1, 2026
Tennessee Rep. David Hawk
425 Rep. John Lewis Way N.
Suite 648 Cordell Hull Bldg.
Nashville, TN 37243
Email: rep.david.hawk@capitol.tn.gov
Re: 	Tennessee House Bill 2278/Senate Bill 2414 Concerning Expiration of Ballad
Health Certificate of Public Advantage and House Bill 819/Senate Bill 1369
Removing Certificate of Need Requirements for Acute Care Hospitals
Dear Representative Hawk:
The Directors of the Federal Trade Commission’s (“FTC”) Office of Policy Planning,
Bureau of Competition, and Bureau of Economics are pleased to respond to your March 27,
2026, inquiry about the competitive implications of proposed legislation pertaining to
Tennessee’s Certificate of Public Advantage (“COPA”) and Certificate of Need (“CON”) laws.
Promoting competition in the healthcare sector—which spurs innovation, lowers prices, and
improves quality and access for healthcare services—is among Chairman Andrew Ferguson’s
highest priorities for the FTC. We write this letter to advance these objectives.
With respect to COPA laws, we understand that the Tennessee General Assembly is
considering proposed legislation to amend the Hospital Cooperation Act of 1993.1 In 2018,
Ballad Health obtained a COPA under this statute, which requires active supervision by the
Tennessee Department of Health (“TDH”).2 If enacted, House Bill 2278 (“HB2278”) and Senate
Bill 2414 (“SB2414”) would allow the Ballad Health COPA to expire on June 30, 2028.3 The
consequence: eliminating all TDH supervision currently in effect relating to Ballad Health’s
quality of healthcare services, availability and access to care, as well as population health
initiatives—leaving only the current pricing restrictions to be enforced by the Tennessee
Attorney General for no longer than five years.
1 Tennessee Code Annotated, Title 68, Chapter 11, Part 13.
2 See Tennessee Department of Health, Certificate of Public Advantage (COPA), https://www.tn.gov/health/health-
program-areas/health-planning/certificate-of-public-advantage.html.
3 Tennessee General Assembly (114th Legislative Session), House Bill 2278 and Senate Bill 2414 (introduced Feb.
2, 2026), https://wapp.capitol.tn.gov/apps/BillInfo/Default?BillNumber=HB2278&GA=114. As introduced, these
are caption bills for which an amendment is necessary to achieve full effect. On March 26, 2026, the Senate passed
SB2414 as amended before transmitting to the House. See Senate Health and Welfare Amendment No. 1 to SB2414,
available at https://capitol.tn.gov/Bills/114/Amend/SA0777.pdf.
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We write to highlight the FTC’s prior work regarding COPA laws, particularly the
negative consequences of removing state regulatory oversight for a hospital monopoly formed
pursuant to a COPA. The FTC generally recommends that state lawmakers not enact new COPA
laws and repeal existing COPA laws. However, there is an important caveat. Repealing a COPA
law or allowing a specific COPA to expire in the absence of competing healthcare systems
enables a monopolist to exercise substantial market power unconstrained by state regulatory
oversight or antitrust enforcement against merger-related harms.4 In many ways, this scenario is
the worst possible outcome for patients: the hospital evades antitrust scrutiny on the front end by
virtue of the COPA, and then evades scrutiny by the state governments on the back end by virtue
of the COPA’s expiration.
With respect to CON laws, we understand that the Tennessee General Assembly is
considering proposed legislation to amend the Tennessee Health Services and Planning Act of
2021,5 which currently requires acute care hospitals to obtain CON approval before they can
open new facilities in Tennessee. House Bill 819 (“HB819”) and Senate Bill 1369 (“SB1369”)
were introduced to remove CON requirements for acute care hospitals beginning July 1, 2028,
however, this effective date may be amended to July 1, 2030.6 The General Assembly may find
the FTC’s prior work regarding CON laws informative as it considers these bills. In the FTC’s
experience, CON laws prevent the efficient functioning of healthcare markets. They create
barriers to entry and expansion, thus limiting consumer choice and stifling innovation. For these
reasons, the FTC and the U.S. Department of Justice Antitrust Division (“the Agencies”) have
consistently advocated that states repeal or curtail their CON laws.7
House Bill 2278 and Senate Bill 2414: Ballad Health COPA Expiration
As you may be aware, FTC staff opposed the Ballad Health COPA, issuing several public
comments and providing testimony in 2016 to 2017.8 FTC staff also held a public workshop in
2019, during which participants discussed early observations of the Ballad Health COPA.9 Under
4 See Federal Trade Commission, FTC Policy Perspectives on Certificates of Public Advantage at 7 (Aug. 15, 2022),
https://www.ftc.gov/system/files/ftc_gov/pdf/COPA_Policy_Paper.pdf.
5 Tennessee Code Annotated, Title 68, Chapter 11, Part 16. See Tennessee Health Facilities Commission, Certificate
of Need, https://www.tn.gov/hfc/certificate-of-need-information.html.
6 Tennessee General Assembly (114th Legislative Session), House Bill 819 (introduced Feb. 4, 2025) and Senate Bill
1369 (introduced Feb. 6, 2026), https://wapp.capitol.tn.gov/apps/BillInfo/Default?BillNumber=HB0819&ga=114.
On March 26, 2026, the Senate passed SB1369 as amended before transmitting to the House. The Senate
amendments extended the effective date to July 1, 2030, and the House is considering similar amendments.
7 For a recent overview of the Agencies’ CON advocacy, see FTC Letter to Rhode Island Governor McKee on
Proposed CON Amendments (Apr. 16, 2025), https://www.ftc.gov/system/files/ftc_gov/pdf/ftc-letter-to-ri-gov-
mckee-on-proposed-con-amendments.pdf.
8 FTC Staff Submissions Regarding the Proposed Merger and COPA Applications of Mountain States Health
Alliance and Wellmont Health System, https://www.ftc.gov/enforcement/cases-proceedings/151-0115/wellmont-
healthmountain-states-health.
9 FTC Public Workshop, A Health Check on COPAs: Assessing the Impact of Certificates of Public Advantage in
Healthcare Markets (Jun. 18, 2019), https://www.ftc.gov/news-events/events/2019/06/health-check-copas-
assessing-impact-certificates-public-advantage-healthcare-markets. See Jackie DeFusco, Ballad Health COPA:
Insufficient or Raising the Standard for State Oversight?, WJHL NEWS CHANNEL 11 (Jun. 26, 2019),
https://www.wjhl.com/news/local/ballad-health-copa-insufficient-or-raising-the-standard-for-state-oversight/.
Furthermore, FTC staff are currently conducting an empirical study of the Ballad Health COPA—particularly its
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the Ballad Health COPA, TDH serves as the primary agency responsible for approving and
monitoring compliance with the COPA.
As we understand HB2278 and SB2414, the proposed bills would end all state oversight
of the Ballad Health COPA by TDH.10 Currently, TDH oversight includes various terms and
conditions relating to quality of healthcare services, expanded access to healthcare services,
population health improvement initiatives, health research and graduate medical education,
facility maintenance and capital expenditures, regional health information exchange, and
employee benefits and protections.11 After the Ballad Health COPA expires, only the pricing
restrictions that are then in effect would remain until the earlier of June 30, 2033 or the date that
a new inpatient acute care hospital opens in the geographic service area covered by the Ballad
Health COPA. These pricing restrictions would be enforced by the Tennessee Attorney General
pursuant to a supervision agreement, rather than TDH.
We respectfully suggest that the General Assembly review the FTC staff policy paper
entitled FTC Policy Perspectives on Certificates of Public Advantage12 during its consideration
of HB2414 and SB2278. This policy paper describes the available empirical support for the
FTC’s long-standing concerns with COPAs, which allow for anticompetitive hospital
consolidation that is likely to raise the prices of healthcare services for consumers, reduce quality
of care and patient health outcomes, limit patient access for healthcare services and facilities, and
depress wages for hospital employees.
The policy paper also describes FTC staff’s observations that COPAs can be extremely
difficult to implement and monitor over time, and regulatory conditions are often unsuccessful in
mitigating merger-related price and quality harms. One challenge is that hospitals exploit
regulatory fatigue in an effort to evade COPA regulations. After being allowed to merge, “the
hospitals subject to COPAs often lobby for repeal of COPA oversight or fewer COPA
conditions, citing costs and difficulties of compliance.”13
Given this risk, the policy paper expressly warns about the consequences of states
repealing COPA legislation in a way that “eliminate[s] state regulatory oversight of the hospital
systems that were allowed to merge under COPAs.”14 For such a legislative change, “the
practical effect” is to hand the “merged healthcare system” monopoly power “unconstrained by
either state regulation or antitrust enforcement against merger-related harms.” 15 In sum, when
potential impact on prices, quality of care, access to services, and employee wages. FTC Press Release, FTC to
Study the Impact of COPAs (Oct. 21, 2019), https://www.ftc.gov/news-events/press-releases/2019/10/ftc-study-
impact-copas. As of now, the study is ongoing and findings have not been completed.
10 Tennessee General Assembly (114th Legislative Session), House Bill 2278 and Senate Bill 2414 (introduced Feb.
2, 2026), https://wapp.capitol.tn.gov/apps/BillInfo/Default?BillNumber=HB2278&GA=114.
11 See Fifth Amended and Restated Terms of Certification Governing the Certificate of Public Advantage Issued to
Ballad Health (Jan. 1, 2025), https://www.tn.gov/content/dam/tn/health/documents/copa/Fifth-Amended-and-
Restated-TOC-Governing-the-COPA.pdf.
12 See Federal Trade Commission, FTC Policy Perspectives on Certificates of Public Advantage (Aug. 15, 2022) and
Key COPA Facts, both available at www.ftc.gov/copa.
13 Federal Trade Commission, FTC Policy Perspectives on Certificates of Public Advantage at 4 (Aug. 15, 2022),
https://www.ftc.gov/system/files/ftc_gov/pdf/COPA_Policy_Paper.pdf.
14 Id. at 7.
15 Id. at 4.
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COPAs expire the risk of price and quality harms increases significantly, including harm to
quality of care and availability of healthcare services.16 The FTC takes seriously monopolies in
healthcare markets and if state regulatory oversight is eliminated, for example in the wake of a
COPA expiration, the Commission will review developments closely.
The FTC staff comments and testimony concerning Ballad Health’s application for a
COPA may also be instructive for the General Assembly. During that process, FTC staff
discussed future competition concerns, including potential roadblocks to antitrust enforcement
and to new entrants seeking to compete in the market. Obtaining effective relief through antitrust
enforcement is inherently challenging after mergers have already been consummated.17 As for
new entrants, FTC staff explained that CON laws posed a regulatory barrier to entry. And the
combined hospital system “would have every incentive to oppose potential entrants’ CON
applications, making entry even less likely.”18 To address this concern, Ballad Health was
originally prohibited from opposing CON applications. This condition, however, has since been
removed, leaving Ballad Health free to oppose the entry of new competitors.19
To the extent that Tennessee’s COPA law is amended and the Ballad Health COPA
expires, the General Assembly may want to consider the FTC’s research in deciding whether the
legislature has sufficiently mitigated the risks of increased prices of healthcare services for
consumers, reduced quality of care and patient health outcomes, less patient access for healthcare
services and facilities, and depressed wages for hospital employees.
House Bill 819 and Senate Bill 1369: Removal of CON Requirements
We understand that HB819 and SB1369 have been proposed to remove CON
requirements for acute care hospitals. The potential opening of a new inpatient acute care
hospital would be a positive step towards replacing the hospital competition that was lost in
Northeast Tennessee as a result of the merger that formed Ballad Health. Removing unnecessary
CON regulatory barriers to facilitate new hospital entry is consistent with recommendations in
16 Id. at 4, 7, 12.
17 See FTC Staff Submission to TDH Regarding COPA Application of Mountain States Health Alliance and
Wellmont Health System at 63–64 (Nov. 21, 2016),
https://www.ftc.gov/system/files/documents/advocacy_documents/ftc-staff-submission-tennessee-department-
health-regarding-certificate-public-advantage-application/161122wellmontcommenttenn.pdf; see also FTC Staff
Supplemental Submission to TDH Regarding COPA Application of Mountain States Health Alliance and Wellmon
Health System at 9 (Jan. 5, 2017), https://www.ftc.gov/system/files/documents/advocacy_documents/ftc-staff-
supplemental-submission-tennessee-department-health-regarding-certificate-public-
advantage/170105mshatennesseesuppcmt.pdf (discussing “the challenges of prying apart an integrated system of 19
hospitals” and whether there would likely be “any meaningful ability to return Mountain States and Wellmont to
their pre-consolidation state” to “rectify” the loss competition).
18 See FTC Staff Submission to TDH Regarding COPA Application of Mountain States Health Alliance and
Wellmont Health System at 51–52 (Nov. 21, 2016),
https://www.ftc.gov/system/files/documents/advocacy_documents/ftc-staff-submission-tennessee-department-
health-regarding-certificate-public-advantage-application/161122wellmontcommenttenn.pdf.
19 Federal Trade Commission, FTC Policy Perspectives on Certificates of Public Advantage at 11 (Aug. 15, 2022),
https://www.ftc.gov/system/files/ftc_gov/pdf/COPA_Policy_Paper.pdf.
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FTC staff’s prior advocacy,20 as well as the Trump Administration’s Rural Health
Transformation program.21
Competition in health care markets benefits consumers by containing costs, reducing prices,
improving quality, and encouraging innovation. Empirical evidence demonstrates that
competition generally results in lower prices for, and broader access to, health care products and
services. And non-price competition promotes higher quality care and encourages innovation.22
In contrast, based on considerable experience and several decades of studying the
competitive effects of CON laws, the FTC has found that CON laws create barriers to entry and
expansion, limit consumer choice, and stifle innovation. Incumbent providers may leverage CON
laws to thwart or delay entry and expansion by potential competitors and other market
participants. Most of the evidence to date suggests that CON laws have not been successful in
controlling healthcare costs or improving quality of healthcare services.23 Moreover, CON laws
require new entrants and incumbent providers to obtain state-issued approval before constructing
new facilities or offering certain healthcare services. By interfering with the market forces that
normally determine the supply of facilities and services, CON laws can suppress supply,
misallocate resources, and shield incumbent healthcare providers from competition by new
entrants.
Specifically, prior FTC advocacy explains that CON laws can:
 	Raise the cost of entry and expansion—by adding time, uncertainty, and the cost of the
approval process itself—for firms that have the potential to offer new, lower-cost, more
convenient, or higher-quality services;
 	Remove, reduce, or delay the competitive pressures that typically incentivize incumbent
firms to innovate, improve existing services, introduce new services, or moderate prices;
and
 	Prohibit entry or expansion in the event that a CON is denied.24
20 See, e.g., Joint Statement of the Federal Trade Commission and the Antitrust Division of the U.S. Department of
Justice Regarding Certificate-of-Need Laws and Alaska Senate Bill 62 (Apr. 12, 2017) [hereinafter FTC-DOJ
Alaska Statement], https://www.justice.gov/archives/opa/press-release/file/957186/dl; Joint Statement of the Federal
Trade Commission and the Antitrust Division of the U.S. Department of Justice on Certificate-of-Need Laws and
South Carolina House Bill 3250 (Jan. 11, 2016) [hereinafter FTC-DOJ South Carolina Statement],
https://www.justice.gov/atr/file/812606/download; Joint Statement of the Federal Trade Commission and the
Antitrust Division of the U.S. Department of Justice to the Virginia Certificate of Public Need Work Group (Oct. 26,
2015) [hereinafter FTC-DOJ Virginia Statement], https://www.justice.gov/atr/case-document/file/788171/dl.
21 See Centers for Medicare & Medicaid Services, Rural Health Transformation (RHT) Program,
https://www.cms.gov/priorities/rural-health-transformation-rht-program/overview; Rich Daly, Federal Scoring
System Spurs State Action on Certificate-of-Need Laws, Healthcare Financial Management Association (Jan. 26,
2026), https://www.hfma.org/fast-finance/federal-scoring-system-spurs-state-action-on-certificate-of-need-laws/.
22 See, e.g., FTC-DOJ Alaska Statement at 5, 10–11, for discussion of the benefits of competition.
23 See FTC Letter to Rhode Island Governor McKee on Proposed CON Amendments at 2 (Apr. 16, 2025),
https://www.ftc.gov/system/files/ftc_gov/pdf/ftc-letter-to-ri-gov-mckee-on-proposed-con-amendments.pdf.
24 See, e.g., FTC-DOJ Alaska Statement at 5–6; FTC-DOJ South Carolina Statement at 6–7; FTC-DOJ Virginia
Statement at 6–7.
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For all of these reasons, the Agencies have consistently suggested that states repeal or narrow
their CON laws.
As originally introduced, the effective date of HB819 and SB1369 would have been July
1, 2028—one day after the Ballad Health COPA may be set to expire. Since then, the Senate
passed amendments that extend the effective date to July 1, 2030, and the House is considering
similar amendments.25 This extension would create a two-year gap between the Ballad Health
COPA expiration in 2028 and the removal of the CON requirement for acute care hospitals in
2030. As noted above, the prior FTC staff comment discussed how Tennessee’s CON laws “pose
an additional barrier to entry.” 26 Ballad Health, for its part, would have “every incentive” to
oppose competitors applying for CONs, which would decrease the likelihood of entry.
The General Assembly may wish to consider the FTC’s research and previous advocacy
efforts in deciding whether delaying competition by delaying the repeal of CON laws
undermines the legislature’s goal of increasing competition. Repealing the CON laws as soon as
possible—and in no event later than the expiration of any COPA—would offer the promise of
additional competition in Northeast Tennessee.
Conclusion
We invite the General Assembly to work collaboratively with us to minimize the harmful
effects of anticompetitive hospital consolidation, as well as to enhance the benefits of hospital
competition by removing unnecessary regulatory barriers to entry. We are happy to speak with
you further about the recommendations and studies described in the FTC’s prior advocacy
regarding COPA and CON laws and regulations.
Please direct all questions regarding this submission to Stephanie Wilkinson, Attorney
Advisor, Office of Policy Planning, 202-326-2084, swilkinson@ftc.gov, and Ricardo Woolery,
Attorney Advisor, Office of Policy Planning, 202-326-3623, rwoolery@ftc.gov.
Best regards,
/s/ Brendan Chestnut 	/s/ Ted Rosenbaum 	/s/ Daniel Guarnera
Brendan Chestnut 	Ted Rosenbaum 	Daniel Guarnera
Director 	Acting Director 	Director
Office of Policy Planning 	Bureau of Economics 	Bureau of Competition
25 See SB1369 Amendments 1–3 and HB819 Amendments 1–2, available at
https://wapp.capitol.tn.gov/apps/BillInfo/Default?BillNumber=HB0819&ga=114.
26 See FTC Staff Submission to TDH Regarding COPA Application of Mountain States Health Alliance and
Wellmont Health System at 51–52 (Nov. 21, 2016),
https://www.ftc.gov/system/files/documents/advocacy_documents/ftc-staff-submission-tennessee-department-
health-regarding-certificate-public-advantage-application/161122wellmontcommenttenn.pdf.
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