Six States Say They’ll Cut Red Tape Hospital Laws In Exchange For Federal Funds

In light of federal incentives from the Trump administration, six states say they plan to revisit their regulatory laws on hospital facilities.

Tennessee, Alaska, Connecticut, Delaware, Iowa and Mississippi are considering ending their “Certificate Of Need” (CON) hospital regulation laws with funding help from the One Big Beautiful Bill Act (OBBBA), which President Donald Trump signed in July 2025, CBS News reported Monday. These regulatory laws — which primarily serve the purpose of cost control — require hospitals to obtain approval from health planning agencies before establishing or expanding their facilities, according to the National Conference of State Legislatures.

As part of Trump’s signature law, the Center for Medicare and Medicaid Services (CMS) unveiled a five-year $50 billion”Rural Health Transformation Program” which will allocate more funds to rural hospitals in states who re-assess their CON laws, according to the outlet.

“Certificate of Need is an additional expense and burden on rural facilities,” reads a 2025 notice from CMS on states applying for CON laws. The notice said states with fewer certificate of need rules would get higher scores to receive more funding.

CMS did not respond to the Daily Caller News Foundation’s request for comment.

The CMS program will provide an additional $10 billion in funding each year from 2026 through 2030, a White House official told the DCNF in a statement.

The funds can be used to help hospital facilities make investments necessary to better meet the needs of communities and become more sustainable over the long term, the official added, calling the administration’s actions “the largest ever investment,” in rural healthcare.

“The Rural Health Transformation Program it created is currently investing billions of dollars to transform rural health access and actually meet the unique needs of these communities instead of simply pouring money into the failed approaches of the past,” White House spokeswoman Allison Schuster told the DCNF in a statement. “President Trump continues to prioritize the health of rural Americans by taking innovative, decisive action to lower costs and improve quality of care for millions of hardworking Americans.”

Since the initiation of the Rural Health Transformation Program became law last year, Tennessee is the state that’s taken the most action towards nixing its CON laws, according to CBS News. In April, lawmakers passed a bill to unravel most remaining rules over the course of four years.