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HB0385 • 2026

Taxes

AN ACT to amend Tennessee Code Annotated, Title 67, Chapter 4, relative to tax relief.

Healthcare Taxes
Active

The official status still shows this bill as active or still awaiting another formal step.

Sponsor
Butler, Hensley
Last action
2025-03-25
Official status
Taken off notice for cal. in Insurance Committee
Effective date
Not listed

Plain English Breakdown

Checked against official source text during the last sync.

TennCare Tax Relief Act

This bill requires TennCare to certify healthcare providers' unreimbursed costs as charitable donations if they pay a $25 annual fee, and it applies starting July 1, 2025.

What This Bill Does

  • Requires TennCare to issue certificates for eligible healthcare providers who have paid a $25 annual fee.
  • Certifies the difference between 125% of federal Medicaid reimbursement rates and actual TennCare payments as charitable contributions.
  • Provides statements to healthcare providers by January 31 each year detailing their charitable contributions from the previous calendar year.
  • Allows TennCare to create rules for implementing this act.

Who It Names or Affects

  • Healthcare providers participating in the TennCare program
  • TennCare and managed care organizations

Terms To Know

Eligible healthcare provider
A healthcare provider or group practice that participates in the TennCare program.
Unreimbursed costs
The difference between what TennCare pays and 125% of federal Medicaid reimbursement rates for services provided to TennCare recipients.

Limits and Unknowns

  • This bill applies only to contributions made on or after July 1, 2025.
  • It does not specify the exact impact on healthcare costs or provider revenues.

Bill History

  1. 2025-03-25 Tennessee General Assembly

    Taken off notice for cal. in Insurance Committee

  2. 2025-03-19 Tennessee General Assembly

    Placed on cal. Insurance Committee for 3/25/2025

  3. 2025-03-19 Tennessee General Assembly

    Action deferred in Senate Health & Welfare Committee to first calendar of 2026

  4. 2025-03-18 Tennessee General Assembly

    Rec. for pass by s/c ref. to Insurance Committee

  5. 2025-03-12 Tennessee General Assembly

    Placed on s/c cal Tenncare Subcommittee for 3/18/2025

  6. 2025-03-12 Tennessee General Assembly

    Placed on Senate Health and Welfare Committee calendar for 3/19/2025

  7. 2025-03-12 Tennessee General Assembly

    Action deferred in Senate Health and Welfare Committee to 3/19/2025

  8. 2025-03-05 Tennessee General Assembly

    Placed on Senate Health and Welfare Committee calendar for 3/12/2025

  9. 2025-02-10 Tennessee General Assembly

    Passed on Second Consideration, refer to Senate Health and Welfare Committee

  10. 2025-02-05 Tennessee General Assembly

    Assigned to s/c Tenncare Subcommittee

  11. 2025-02-05 Tennessee General Assembly

    P2C, ref. to Insurance Committee - Government Operations for Review

  12. 2025-02-03 Tennessee General Assembly

    Intro., P1C.

  13. 2025-01-27 Tennessee General Assembly

    Filed for introduction

  14. 2025-01-27 Tennessee General Assembly

    Introduced, Passed on First Consideration

  15. 2025-01-23 Tennessee General Assembly

    Filed for introduction

Official Summary Text

This bill requires
TennCare, upon payment of the

fee
described below, to
certify an eligible healthcare provider's unreimbursed costs
, which is an amount
equal to
the difference between 125% of the average federal medicaid reimbursement rate and the TennCare reimbursement rate paid to
the
provider by the division
of TennCare
or a managed care organization for healthcare services provided by
the
provider to a TennCa
re recipient
,
in a calendar year as charitable contributions made exclusively for public purposes to TennCare pursuant to
federal law relative to charitable contributions and gifts
. TennCare
must
provide the provider with a statement of the total amount o
f such charitable contributions provided by the provider in a calendar year by January 31 of the following year.
This bill applies to contributions made on or after July 1, 2025.

ELIGIBLE HEALTHCARE PROVIDERS

As used in this bill, an
"
e
ligible healthca
re provider" means
(i) a
healthcare provider who participates as a provider in the TennCare program or
(ii) a
group practice that holds a contract with the division
of TennCare
or a managed care organization participating in the TennCare program
. However,
a "group practice" d
oes not include a hospital, ambulatory surgical treatment center, assisted-care living facility, nursing home, outpatient diagnostic center, or home care organization, or other healthcare institution
s
or facilit
ies.

CERTIFICATION FEE

This bill requires an
eligible healthcare provider
to
pay TennCare $25 each year by January 15 to receive the certification produced under
this bill
. If an eligible healthcare provider is a group practice, then the eligible healthcare provider
must
pay
TennCare $25 for each healthcare provider in the group practice by January 15 to receive the certification produced under
this bill
.

RULEMAKING

This bill authorizes the division of TennCare to
promulgate rules to implement this
bill
.

Current Bill Text

Read the full stored bill text
SENATE BILL 264
By Hensley

HOUSE BILL 385
By Butler

HB0385
001950
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 67,
Chapter 4, relative to tax relief.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 67, Chapter 4, is amended by adding
the following as a new part:
67-4-1301.
As used in this part:
(1) "Division" means the division of TennCare;
(2) "Eligible healthcare provider" or "provider" means:
(A) A healthcare provider who participates as a provider in the
TennCare program or a successor medicaid program provided for in title
71, chapter 5; or
(B) A group practice that holds a contract with the division or a
managed care organization participating in the TennCare program or a
successor medicaid program provided for in title 71, chapter 5;
(3) "Group practice":
(A) Means two (2) or more healthcare providers who are
associated together in a healthcare practice;
(B) Includes a corporation, limited liability company, or
partnership organized or owned by two (2) or more healthcare providers
who are associated together in a healthcare practice; and

- 2 - 001950

(C) Does not include a hospital, ambulatory surgical treatment
center, assisted-care living facility, nursing home, outpatient diagnostic
center, or home care organization as such terms are defined in § 68-11-
201, or other healthcare institution or facility;
(4) "Healthcare provider" means an individual who is licensed, certified,
or authorized or permitted by the laws of this state to administer health care in
the ordinary course of business or practice of a profession;
(5) "TennCare recipient" means an individual eligible for and enrolled in
the TennCare program or a successor medicaid program provided for in title 71,
chapter 5; and
(6) "Unreimbursed costs" means an amount equal to the difference
between one hundred twenty-five percent (125%) of the average federal
medicaid reimbursement rate and the TennCare reimbursement rate paid to an
eligible healthcare provider by the division or a managed care organization for
healthcare services provided by an eligible healthcare provider to a TennCare
recipient.
67-4-1302.
(a) TennCare shall, upon payment of the fee prescribed under subsection (b),
certify an eligible healthcare provider's unreimbursed costs in a calendar year as
charitable contributions made exclusively for public purposes to TennCare pursuant to
26 U.S.C. § 170. TennCare shall provide the eligible healthcare provider with a
statement of the total amount of such charitable contributions provided by the eligible
healthcare provider in a calendar year by January 31 of the following year.
(b) An eligible healthcare provider shall pay TennCare twenty-five dollars
($25.00) each year by January 15 to receive the certification produced under subsection

- 3 - 001950

(a). If an eligible healthcare provider is a group practice, then the eligible healthcare
provider shall pay TennCare twenty-five dollars ($25.00) for each healthcare provider in
the group practice by January 15 to receive the certification produced under subsection
(a).
(c) The division is authorized to promulgate rules to implement this part. All
rules must be promulgated in accordance with the provisions of the Uniform
Administrative Procedures Act, compiled in title 4, chapter 5.
SECTION 2. For purposes of promulgating rules, this act takes effect upon becoming a
law, the public welfare requiring it. For all other purposes, this act takes effect July 1, 2025, the
public welfare requiring it, and applies to charitable contributions made on or after that date.