Hospitals and Health Care Facilities

<BillNo> <Sponsor>

SENATE BILL 2496
By Kyle
SB2496
012024
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AN ACT to amend Tennessee Code Annotated, Title 68,
Chapter 11, Part 13, relative to the Hospital
Cooperation Act of 1993.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 68, Chapter 11, Part 13, is amended by
adding the following as a new section:
68-11-1311. Prohibition on anti-competitive agreements and conduct.
(a) The general assembly finds that:
(1) Notwithstanding the Tennessee Constitution's categorical prohibition
against monopolies, this state has elected to engage in an economic experiment
allowing monopolies, specifically, a scheme in which hospital systems could be
exempted from antitrust regulation under a presumption that state supervision by
the department of health and the attorney general and reporter could assure that
public benefits would outweigh public harms;
(2) The merger that created Ballad Health was permitted pursuant to this
economic experiment, over objection and warnings from the federal trade
commission;
(3) Notably, there is now clear evidence of public harms, including, but
not limited to, Ballad Health's failure to meet its annual charity care obligations by
approximately one hundred forty-eight million dollars ($148,000,000) over a span
of four (4) years; and Ballad Health's overwhelming failure to meet its quality-of-
care benchmarks, including downgrading by the centers for medicare and
medicaid services of Ballad Health's three (3) major community hospitals from
pre-merger ratings of three (3) and four (4) stars to current ratings of one (1) and

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two (2) stars, and failing sixty-one (61) of seventy-five (75) target quality
measures from July 2021 through June 2022;
(4) The Tennessee department of health and the attorney general and
reporter have allowed these and other harms, as shown by repeatedly waiving
the charity care obligations each year after Ballad Health failed to meet them;
keeping the public in the dark about quality of health care by stopping publication
of a "final score" for Ballad Health's compliance with the terms of certification for
the certificate of public advantage (COPA); loosening original restrictions
designed to protect the region against abuse and exploitation of monopoly power
by specifically allowing Ballad Health to oppose any certificate of need
application by competitors and allowing Ballad Health to restrict healthcare
employment and practice opportunities with restrictive non-compete covenants;
and turning a deaf ear to the people of upper east Tennessee by allowing the
local COPA advisory council to cease hosting periodic public hearings to receive
comments, complaints, or concerns from citizens;
(5) The COPA experiment has shown that benefits to the public do not
outweigh the disadvantages and harms. Accordingly, the general assembly finds
that the COPA experiment has failed;
(6) The people of upper east Tennessee should no longer bear the
burden and cost of this failed experiment; and
(7) It is no longer the policy of this state, in any instance, to displace
competition among hospitals, as healthy competition is in the best interest of the
people and in accordance with the Constitution of Tennessee, Article I, § 22.
(b) Notwithstanding another law to the contrary:

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(1) A hospital shall not negotiate or enter into an anti-competitive
agreement or engage in anti-competitive conduct with other hospitals in this
state; and
(2) State funds must not be used to facilitate, or otherwise further, an
activity that constitutes the active supervision of anti-competitive conduct in the
healthcare sector.
SECTION 2. This act takes effect upon becoming a law, the public welfare requiring it,
and applies to contracts and agreements executed, modified, or renewed on or after the
effective date of this act.