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SENATE BILL 1797
By Reeves
HOUSE BILL 2093
By Williams
HB2093
010620
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AN ACT to amend Tennessee Code Annotated, Title 56;
Title 68, Chapter 11 and Title 71, Chapter 5,
relative to managed care organizations.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 71-5-1412, is amended by deleting
the section and substituting:
(a) As used in this section:
(1) "Bureau" means the bureau of TennCare;
(2) "Managed care organization" or "MCO" means a health maintenance
organization, behavioral health organization, or managed health insurance issuer
that has a contract with the bureau and participates in the TennCare program;
(3) "Qualified nursing facility" means a nursing home that is licensed
under title 68, chapter 11, part 2 and is certified by the bureau to provide
medicaid nursing facility services; and
(4) "Termination":
(A) Means the involuntary removal, exclusion, or non-renewal of a
qualified medicaid provider from an MCO's provider network or the
medicaid program; and
(B) Does not include the voluntary withdrawal by the qualified
medicaid provider.
(b) A managed care organization shall contract with any qualified nursing facility
certified by the federal centers for medicare and medicaid services that provide medicaid
nursing facility services pursuant to an approved preadmission evaluation (PAE) and is
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willing to contract with the MCO to provide such services under the same terms and
conditions as are offered to any other participating facility contracted with that MCO to
provide those services under any policy, contract, or plan that is part of the TennCare
managed long-term care service delivery system. The terms and conditions do not
include the rate of reimbursement.
(c)
(1) A managed care organization is prohibited from adopting any
participation requirements, network admission criteria, or termination standards
for a qualified nursing facility beyond those established by the bureau. However,
the MCO may enforce other contractual provisions that do not affect the facility's
participation status.
(2) A managed care organization may enforce the MCO's contract with a
nursing facility, except that the terms of the facility contract must not violate this
section and any enforcement of the MCO's facility contract must strictly comply
with the requirements of this section.
(d)
(1) The bureau has exclusive authority to determine whether a qualified
nursing facility may be terminated from participation in the TennCare program,
which includes the termination of a qualified nursing facility's contract with a
managed care organization.
(2) An MCO shall not suspend, deny, refuse to review, terminate, or
otherwise take any action resulting in the actual or constructive termination of a
qualified nursing facility contract unless:
(A) The bureau has taken a final action to terminate the facility's
medicaid provider agreement;
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(B) The bureau has authorized termination of the specific contract
by written directive to the MCO to terminate or modify the qualified
nursing facility's contract with the MCO because the bureau has
determined such termination or modification is in the best interest of this
state;
(C) The bureau has suspended payment to a provider on account
of a pending investigation of a credible allegation of fraud or abuse; or
(D) The qualified nursing facility has been excluded from the
medicare or medicaid program.
(e)
(1) A managed care organization participating in the long-term care
service delivery system shall not:
(A) Deny a qualified nursing facility the right to participate as a
provider in the medicaid program or an MCO network on the same terms
and conditions as are offered to another similarly situated provider of the
same type; or
(B) Take an action resulting in the actual or constructive
termination of a qualified nursing facility from participation in the medicaid
program or an MCO network except for cause, as described in subsection
(f), or except under authority provided to the bureau under federal or state
law.
(2)
(A) An MCO is prohibited from independently determining a
qualified nursing facility's eligibility to participate in the TennCare
program.
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(B) The bureau has exclusive authority to determine whether a
qualified nursing facility is eligible to participate in the TennCare program.
(f)
(1) A managed care organization shall not include a provision in the
MCO's contract with a qualified nursing facility to provide medicaid nursing facility
services that permit actual or constructive termination by the MCO without cause,
for convenience, or without specifying the grounds for termination.
(2) A contractual provision that grants an MCO authority to terminate a
provider contract independent of an action by the bureau is void and
unenforceable as contrary to public policy.
(3) The bureau shall review and approve all standard contract templates
used by MCOs for facility contracting to ensure compliance with this subsection
(f).
(g)
(1) If a managed care organization identifies concerns regarding a
contracted qualified nursing facility's performance, compliance, or quality of care,
then the MCO shall:
(A) Report the concerns to the bureau with supporting
documentation;
(B) Continue the provider contract while the bureau reviews the
allegation and makes a determination; and
(C) Cooperate with any corrective action plan established by the
bureau.
(2)
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(A) During the review period by the bureau, as described in
subdivision (g)(1)(B), the managed care organization shall:
(i) Honor the provider contract and allow a medicaid
beneficiary who is enrolled in the MCO's plan to continue to
receive services in the qualified nursing facility; and
(ii) Continue to process and pay claims for services in
accordance with the contract.
(B) During the review period by the bureau, as described in
subdivision (g)(1)(B), the qualified nursing facility shall continue to provide
services to an enrolled beneficiary.
(h) This section does not prevent the bureau from enforcing the bureau's
provider agreement with a qualified nursing facility or from adopting reasonable and
necessary requirements for the participation of a qualified nursing facility in the
TennCare program. All requirements for participation adopted after July 1, 2016, shall
be promulgated by the bureau as a rule under title 4, chapter 5, part 2, and must include
a hearing under § 4-5-203, prior to the enforcement of such requirement as part of any
provider contract, unless otherwise required by federal law.
(i) This section does not limit or expand:
(1) The authority of the bureau to terminate a qualified nursing facility
medicaid provider agreement under state or federal authority as the medicaid
single state agency; or
(2) A qualified nursing facility's right to contest such actions under state
or federal law, which includes the appeals process, pursuant to 42 CFR Parts
431 and 498.
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SECTION 2. If any provision of this act or the application of any provision of this act to
any person or circumstance is held invalid, then the invalidity does not affect other provisions or
applications of the act that can be given effect without the invalid provision or application, and to
that end, the provisions of this act are severable.
SECTION 3. This act takes effect July 1, 2026, the public welfare requiring it, and
applies to policies, plans, and contracts entered into, renewed, amended, or delivered on or
after that date.