Signed into law on May 21, 2025, Tennessee HB 979 loosens restrictions on hospital employment of physicians to help address physician shortages, especially in rural and underserved areas. Effective July 1, 2025, the law allows: hospitals in counties with 105,000 or fewer residents to employ physicians of any specialty without restriction. Additionally, the law allows children’s hospitals to employ physicians of any specialty, provided hospital-based physicians (radiologists, anesthesiologists, pathologists, emergency medicine) are board-certified or board-eligible.
Recent Tennessee legislation seeks to address rural physician shortages
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Hospitals in more populous counties (over 105,000 residents) still must follow the prior existing restrictions and may not employ hospital-based specialists.
Exemptions remain for:
Physician groups organized as professional corporations
Nonprofit or academic medical centers with faculty practice plans
Research hospitals (where ≥50% of inpatients are treated under research protocols)
Hospitals employing physicians under HB 979 also may not interfere with clinical or referral decisions unless such restrictions are contractually agreed to, do not harm the patient and are disclosed to the patient.