Taxpayer and Consumer Watchdog Group Releases Analysis of Revenue and Charity Care from Tennessee Hospital Systems 

For Immediate Release

Contact: Kara Zupkus, (224) 456-0257

WASHINGTON, D.C. – As the statewide debate over Certificate of Need (CON) repeal has progressed, the Taxpayers Protection Alliance (TPA) released an actuarial analysis of sixteen medium and large Tennessee hospital systems’ revenue and charity care levels.

TPA President David Williams offered the following statement:

“CON reform is critical in helping healthcare recipients receive the care they need. Many incumbent providers and other proponents of Tennessee’s CON law have raised concerns that repealing the state’s remaining CON requirements would harm charity care – the care hospitals provide to uninsured and underinsured individuals, for which they do not expect to be reimbursed. They assert that eliminating CON regulations could allow tax-paying hospitals to build facilities in areas where they can ‘cherry pick’ payors with commercial insurance that are most profitable, leaving nonprofit hospitals with more patients that would be classified as charity care.

“Based on an analysis of the payor mix (that is, the different sources of revenue) of medium and large-sized hospitals in Tennessee, tax-paying hospitals are some of the leading providers of charity care in the state, including serving patients with TennCare. In fact, several nonprofit hospital systems that have strongly opposed CON repeal are at the bottom of the list of charity care providers in the state as a percentage of their total revenue.

“In addition to the raw data presented in TPA’s analysis undercutting the ‘cherry picking’ argument of CON proponents, it must be noted that all Tennessee hospitals (regardless of tax status) are obligated by law to treat any patient that walks through their doors.

“Despite there being little to no evidence to support the ‘cherry-picking’ claim of CON proponents, they continue to scaremonger citizens and legislators with this misleading argument. The CEO and president of the Tennessee Hospital Association, who recently had an op-ed published by The Tennessean, reiterated the false and misleading ‘cherry picking’ claim.

“The Tennessee state legislature is preparing to advance legislation to significantly reform the state’s CON laws, as outlined in a report published by Tennessee’s CON Reform Working Group.

“Repealing the state’s anticompetitive CON regulations for critical services and facilities will help ensure Tennessee residents can continue to access the healthcare services they rely on and enable Tennessee’s healthcare system to meet increased demand in growing communities across the state. TPA reiterates our call for the General Assembly to pass, and Governor Lee to sign, legislation this session reflecting the recommendations in the Working Group’s report to increase access to healthcare services for Tennessee patients.”

Williams previously provided commentary on Tennessee’s CON laws, including arguing that they limit healthy competition in the healthcare market and allow for monopolies that harm taxpayers.

Read the full actuarial memo HERE.

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Taxpayers Protection Alliance (TPA) is a non-profit, non-partisan organization dedicated to educating the public through the research, analysis and dissemination of information on the government’s effects on the economy.