Proposed Erlanger North mental health hospital won’t need prior state approval under new Tennessee law

Staff Photo by Elizabeth Fite / The sun sets behind Erlanger North Hospital on Thursday. Plans are underway to convert the acute care hospital into an inpatient behavioral health hospital.

Unlike the last time Erlanger moved to open a behavioral health hospital, officials won't have to seek permission from state regulators to do so for the planned conversion of Erlanger North Hospital in Red Bank into a joint venture mental health facility.

The Tennessee General Assembly in 2021 amended the state's certificate of need law -- which requires health care providers to prove that there's a need before undergoing a project to start or expand certain health care services -- to exempt all psychiatric services and facilities. Lawmakers' rationale was that there shouldn't be any additional hurdles to offering behavioral health care because the need for those services is so great.

The Erlanger Health System Board of Trustees paved the way Thursday to convert the acute care side of Erlanger North Hospital on Morrison Springs Road into a 48-bed behavioral health hospital leased by Erlanger Behavioral Health -- a joint venture in which Franklin, Tennessee-based Acadia Healthcare owns 80% and Erlanger Health System owns 20%.

Erlanger Behavioral Health already operates a roughly 90-bed psychiatric hospital on Holtzclaw Avenue, just over 1 mile from Erlanger's main campus, that opened in 2018.

When the state granted Erlanger a certificate of need to build that facility in 2016, it was appealed by Parkridge Health, which operates the 64-bed Parkridge Valley Adult and Senior Behavioral Health Care and the 108-bed Parkridge Valley Child and Adolescents Hospital in East Brainerd. Parkridge argued at the time that there was already a sufficient number of psychiatric beds available in the area.

The appeal stalled the Erlanger project for nearly six months months before it was ultimately dropped, but no such appeal could happen for the latest project proposal now that there's no certificate of need requirement.

Parkridge officials did not provide a comment for this story as of press time Friday.

Though the initial Erlanger Behavioral Health Hospital project was able to move forward, the need for mental health beds in the Chattanooga region is still not being met, according to hospital officials.

Erlanger North operated a psychiatric unit for geriatric patients prior to the Holtzclaw facility opening, but a 2019 Community Health Needs assessment conducted by Erlanger noted that "these patients have nowhere to go" since that unit closed.

"The behavioral health problem may actually be more severe now, because EBHH will not accept substance and mental health patients with medical conditions. For elderly patients, this is now a particularly acute issue," the needs assessment stated.

Erlanger spokesperson Blaine Kelley said in an email Friday that it was Acadia officials who approached Erlanger about converting the north hospital and that the need for mental health services for geriatric adults remains.

"Now we are at the point in the process where we can negotiate the contract and plans. The proposed geri-psych use will undergo evaluation," Kelley said. "This is still the beginning of the process, and Acadia has not signed a contract and agreed to anything yet. This is still just the planning stages."

Acadia did not return a request for comment on the new project as of press time Friday.

Contact Elizabeth Fite at or 423-757-6673. Follow her on Twitter @ecfite.