The Trump administration has hinged federal funding for states on whether they end or loosen powerful but controversial laws that regulate the construction of new hospitals — with a handful of states poised to comply.
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handful → hinge → states
The administration told states it would score their applications higher if they walked back their certificate of need, or CON, laws, which give a state approval authority over the expansion or construction of any healthcare facility.
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which → tell → facility
Six states indicated plans to revisit their laws in their applications.
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states → indicate → applications
to states through the five-yearCertificate of need laws, which require that a healthcare provider prove a community need for a new service, were intended to curb monopolies and rising costs.
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provider → require → monopolies
But critics of the laws say they've instead raised healthcare prices, stalled needed facilities, and barred rural patients from new technology.
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they → say → technology
More than 30 states, plus Washington, D.C., enforce some sort of certificate of need law, according to the National Conference of State Legislatures.
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states → enforce → Legislatures
Legislators in several states have been pushing to end the laws, which have faced scrutiny for decades — under Republican and Democratic administrations.
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which → push → administrations
But the Trump administration's aggressive approach to tie the policies to funding has forced states to reckon with their laws quickly.
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approach → tie → laws
The Rural Health Transformation Program was added to President Trump's signature One Big Beautiful Bill Act as an initiative to modernize healthcare in remote areas.
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Program → add → areas
The Centers for Medicare & Medicaid Services, in its notice to states applying to the program, called certificate of need laws "an additional expense and burden on rural facilities" and explained how states with fewer certificate of need rules would get higher scores.
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states → apply → scores
"It's not the first time the federal government used funding as a state carrot (versus using a stick) to encourage alignment on an administration's policy goal," Maureen Hensley-Quinn, a researcher at the National Academy for State Health Policy, said in an email.
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Quinn → use → email
She noted that President Barack Obama's administration included millions of dollars in performance bonuses for states that made it easier for children to enroll in federally funded health insurance.
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children → note → insurance
Hensley-Quinn said the funding "carrot" was an opportunity to take a hard look at whether policies like certificates of need were truly worth it.
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policies → say → need
"States need to carefully weigh the trade-offs of supporting a 'voluntary' federal policy no matter what," she said, "and additional federal financing, especially in tight state budget years, can tip the scale."
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financing → need → scale
Since the Rural Health Transformation Program became law last year, Tennessee has taken the most concrete action.
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Tennessee → become → action
In a bipartisan vote in April, state lawmakers passed a bill that will unravel most of its remaining certificate of need rules over the next four years.
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that → pass → years
Alaska, Connecticut, Delaware, Iowa, and Mississippi have also said they would consider ending or loosening their laws.
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they → say → laws
"If there's an issue where you can have President Obama and President Trump in agreement on something, that tells you the idea probably has some merit," Wes Climer, a Republican state senator in South Carolina, said in 2021, supporting the repeal of that state's certificate of need law.
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Climer → be → law
The legislature voted in 2023 to end most rules in the law, and in January it will stop requiring certificate of need applications for new hospital construction or expansion, leaving them only for nursing homes.
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it → vote → homes
Some certificate of need laws require approval for changes as minor as a new piece of expensive equipment.
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laws → require → equipment
In North Carolina, a hospital that won a certificate of need to build a much-needed facility was mired in a court battle for three years before breaking ground in 2026.
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that → win → 2026
As more states consider removing their certificate of need laws, Hensley-Quinn warns of unintended consequences: Fewer records will exist that help states track hospital ownership.
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states → consider → ownership
Hensley-Quinn said frustrated state officials have come to her years after their states repealed certificate of need laws, saying that even with a licensure process, they don't have insight into the financial state of their health systems or facilities, or how they're managed.
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they → say → systems
Certificate of need laws force companies seeking a new foothold in the state to submit voluminous applications.
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laws → force → applications
Once the laws are gone, few regulations force transparency.
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regulations → go → transparency
That leaves states unaware when a health system contracts with private equity to provide hospital services, for example.
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system → leave → example
"Without CON, without ownership reporting, and without an entity that monitors transactions or providers in that way, there's no way for you to know," Hensley-Quinn said.
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Quinn → monitor → way
Tennessee lawmakers had pushed to change the state's certificate of need law for years but didn't pass sweeping legislation until it faced losing out on federal funding.
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it → push → funding
Like all states, Tennessee is set to receive an equal share of half of the Rural Health Transformation Program's grants, while the other $25 billion in funding is contingent on other factors, including states' policy commitments.
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billion → set → commitments
In 2024, the state's hospital association opposed a repeal effort in a letter penned by 12 hospital and health system leaders, many serving rural areas, though that more limited legislation passed anyway.
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legislation → oppose → areas
A repeal would harm vulnerable patients by driving up costs and thinning existing hospital staff, said Martin Chaney, CEO of Maury Regional Health, a system in rural Middle Tennessee south of Nashville.
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Chaney → harm → Nashville
Ending the law would create rural healthcare deserts, Chaney wrote in the letter, because hospitals would choose to expand in areas that were already the most profitable, where residents had a range of health insurance providers.
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residents → end → providers
"The premise that eliminating CON regulations will expand health care opportunities by increasing competition is not true for ALL Tennesseans," Chaney wrote.
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Chaney → eliminate → Tennesseans
"Instead, it would result in cherry-picking and increasing the gap in access to medical care in rural areas.
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it → result → areas
A month later, TriStar Health — owned by the largest hospital company in the U.S., for-profit HCA Healthcare — applied for a certificate of need to build a hospital just 20 minutes north of Maury Regional Medical Center.
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Health → own → Center
Nashville-based HCA received approval despite brief opposition from Maury Regional Health, the system led by Chaney.
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HCA → base → Chaney
HCA did not respond to requests for comment.
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HCA → respond → comment
Local leaders are divided on what the new hospital would do to healthcare in the region.
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hospital → divide → region
"Competition is good," Maury County Commissioner Kevin Markham told KFF Health News.
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Markham → tell → News
Markham, like many in favor of the new hospital, said that patients should have options when it comes to choosing where they get hospital care.
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they → say → care
…and 5 more, not listed.
The Aporia
