TennCare

Plain English Breakdown

The exact effective date is not specified in the official source material.

TennCare Annual Coverage Assessment Changes

This bill modifies how hospitals licensed in Tennessee after 2021 calculate their annual coverage assessment and adjusts TennCare's payment schedule and funding for certain services.

What This Bill Does

• Changes the way new hospitals licensed in 2021 or later, which do not replace an existing hospital, calculate their annual coverage assessment if they lack a Medicare cost report or full 12-month JAR.
• Specifies that the assessment is implemented only after obtaining certain federal approvals from CMS except for specific CMS approval related to budget neutrality agreement adjustments.
• Adjusts how TennCare divides payments into installments throughout the fiscal year.
• Modifies rules about intergovernmental transfers and assessments when a hospital's status changes.
• Increases funding for non-emergent care services for children aged 12 to 24 months.

Who It Names or Affects

• Hospitals licensed in Tennessee after 2021
• TennCare division of the state government
• Children receiving non-emergent care from 12 to 24 months old

Terms To Know

JAR

Joint Annual Report, a financial report filed by hospitals.

CMS

Centers for Medicare and Medicaid Services, a federal agency that oversees healthcare programs.

Limits and Unknowns

• The bill does not specify the exact effective date.
• Some changes require further approval from CMS before implementation.

Official Summary Text

ON APRIL 14, 2025, THE SENATE ADOPTED AMENDMENT #1 AND PASSED SENATE BILL 576, AS AMENDED.

AMENDMENT #1
rewrites the bill to, instead, make the following revisions to present law
relative to the a
nnual
c
overage
a
ssessment
:



Provide that, i
f a hospital was first licensed in 2021 or later and did not replace an existing hospital, and the hospital does not have a medicare cost report or a full
12
-month

joint annual report

(
JAR
)
filed with the department of health, the hospital's portion of the annual coverage assessment base is the hospital's projected net patient revenue for its first full year of operation
as shown in its certificate of need application or equivalent financial report filed with the health facilities commission or other agency that has issued a license to the hospital to operate in this state
.



Provides that
the assessment is implemented
i
f the

federal centers for medicare and medicaid services

(
CMS
)
determination, approvals, and confirmation have all been obtained except for the approval
from CMS of an adjustment to the budget neutrality agreement with CMS, pursuant to the process set forth in the special terms and conditions in the division's 1115 demonstration project
.



Re
vises
the
provision requiring
the division
of TennCare ("division") to
establish a schedule of four equal installment payments spread as evenly as possible throughout the fiscal yea
r
to
, instead
,
establish a schedule of equal installment payments spread as evenly as possible throughout
fiscal year
.



Adds, i
f the status of a
n excluded
hospital changes to meet the definition of a covered hospital, and if such hospital contributed an intergovernmental transfer, then the intergovernmental transfer and assessment obligations must be applied to such hospital proportionally based on the length of time the hospital met each of the respective definitions.



Adds that, for purposes of the maintenance of coverage trust fund, the
intergovernmental transfer amount is determined on the proportion of a hospital's medicaid days and total outpatient payments as reported on the 2021 JAR.


Increases the expenditure for benefits and services under the division's program from $590,770 to $598,945

to maintain reimbursement at the same emergency care rate as in FY 2024-2025 for nonemergent care to childr
en from
12

to 24

months
.



Increases the expenditure for benefits and services under the division's program from
$
2,111,400
to
$2,140,620

to the division

to offset the elimination of the provision in the division's managed care contractor risk agreements for hospitals
.



Decreases the minimum percentage

paid
to covered hospitals
from
no less than 37%
to no less than 36%
of unreimbursed division costs for all hospitals licensed by the state that reported division charges, revenue, and total expenses on the 202
3
JAR, excluding state-owned hospitals.



Adds
funding for a program manager contract in the amount of

$1,600,000
.



Adds,

if the assessment is implemented after CMS determination, approvals, and confirmation have all been obtained except for the approval from CMS of an adjustment to the budget neutrality agreement with CMS
,
then the expenditures for directed payments to hospitals must be limited to either the same amount authorized for FY 2024,

or a greater amount as determined by the division in consultation with the Tennessee Hospital Association, up to the amount approved by CMS, until such time as the CMS determination, approvals, and confirmation have been obtained and the division provides written notice to the Tennessee Hospital Association
.

Current Bill Text

SENATE BILL 576
By Haile

HOUSE BILL 829
By Hicks G

HB0829
002476
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 71,
Chapter 5, relative to the annual coverage
assessment.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 71-5-2005(g), is amended by
inserting the following immediately preceding the language "The report must":
The division may submit the report on a more frequent basis.
SECTION 2. This act takes effect upon becoming a law, the public welfare requiring it.