FTC Warns Tennessee Lawmakers That Ballad Health Bills Risk "Two-Year Gap" in Oversight

**The FTC told a state legislator that the mismatch between a COPA expiration date and a delayed certificate-of-need repeal would leave a hospital monopolist free of both antitrust and regulatory constraints, calling it "the worst possible outcome for patients."**

The Federal Trade Commission sent a letter on April 1 to Tennessee Rep. David Hawk warning that two bills moving through the General Assembly could create a dangerous regulatory gap governing Ballad Health, the dominant hospital system in Northeast Tennessee.

The problem, the FTC says, is timing. One bill track, HB 2278 / SB 2414, would set Ballad's certificate of public advantage to expire on June 30, 2028. A separate track, HB 819 / SB 1369, would repeal certificate-of-need requirements for acute-care hospitals, but not until July 1, 2030. That leaves two years in which Ballad would operate without COPA oversight and without the competitive entry that CON repeal is meant to enable.

The agency did not mince words. Without competing healthcare systems in place, the FTC wrote, the bills would let "a monopolist" exercise "substantial market power unconstrained by state regulatory oversight or antitrust enforcement against merger-related harms." The FTC called that scenario "the worst possible outcome for patients."

The letter was signed by three senior FTC officials: Brendan Chestnut, Director of the Office of Policy Planning; Ted Rosenbaum, Acting Director of the Bureau of Economics; and Daniel Guarnera, Director of the Bureau of Competition. It urged lawmakers to repeal CON laws "as soon as possible, and in no event later than the expiration of any COPA," saying that approach "would offer the promise of additional competition in Northeast Tennessee."

Both bill tracks are advancing. The House passed HB 2278 / SB 2414 on third consideration on April 6. HB 0819 / SB 1369 passed the House on third consideration on April 13.

Ballad Health was formed through the 2018 combination of two regional hospital systems in Tennessee and Virginia—a merger the FTC opposed on antitrust grounds. Tennessee authorized the deal under its COPA framework, which shields approved mergers from federal antitrust enforcement in exchange for state regulatory oversight. The FTC's new letter underscores that the agency's competitive concerns about the merger have not faded.

The FTC's letter is an advocacy filing, not an enforcement action. The agency cannot block Tennessee legislation. But the letter puts a documented federal warning on the record as lawmakers finalize the regulatory structure that will govern Ballad's market position after the COPA expires.