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SB0185 • 2026

TennCare

AN ACT to amend Tennessee Code Annotated, Title 63; Title 68 and Title 71, Chapter 5, relative to hospital reimbursement.

Healthcare
Active

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

Sponsor
Jackson, Martin B
Last action
2026-04-14
Official status
Placed on Senate Finance, Ways, and Means Committee calendar for 4/21/2026
Effective date
Not listed

Plain English Breakdown

Checked against official source text during the last sync.

TennCare Rural Hospital Reimbursement Act

This bill sets minimum and maximum reimbursement rates for routine, nonspecialized inpatient services at rural hospitals treating TennCare patients based on Medicare rates and requires the bureau to provide updated MS-DRG lists directly to these hospitals.

What This Bill Does

  • Sets a minimum of 100% and a maximum of 120% reimbursement rate for routine, nonspecialized inpatient services at rural hospitals that treat TennCare patients based on Medicare rates.
  • Defines 'rural hospital' as one with no more than 49 licensed beds located outside urban areas according to the federal census bureau.
  • Allows the director of TennCare to seek federal waivers or authorizations needed for implementing these reimbursement percentages without expanding Medicaid.
  • Requires the bureau to publish and update annually a list of MS-DRGs on its website, and also provide this information directly to participating rural hospitals.

Who It Names or Affects

  • Rural hospitals with up to 49 licensed beds that treat TennCare patients
  • TennCare enrollees receiving services at these hospitals

Terms To Know

MS-DRG
A classification system used by Medicare to determine hospital payments based on inpatient stay categories such as diagnosis, severity, and resource utilization.
FFY
Fiscal Year

Limits and Unknowns

  • The bill does not specify how the reimbursement rates will be adjusted for changes in Medicare payments.
  • It is unclear if all rural hospitals will receive direct updates on MS-DRGs or only those participating with TennCare.

Bill History

  1. 2026-04-14 Tennessee General Assembly

    Placed on Senate Finance, Ways, and Means Committee calendar for 4/21/2026

  2. 2025-04-17 Tennessee General Assembly

    Placed on Senate Finance, Ways, and Means Committee calendar for 4/21/2025

  3. 2025-04-14 Tennessee General Assembly

    Placed on Senate Finance, Ways, and Means Committee calendar for 4/15/2025

  4. 2025-04-14 Tennessee General Assembly

    Rule #83(8) Suspended, to be heard in Senate Finance, Ways & Means Committee on 4/15/2025

  5. 2025-04-09 Tennessee General Assembly

    Placed on s/c cal Finance, Ways, and Means Subcommittee for 4/14/2025

  6. 2025-04-09 Tennessee General Assembly

    Placed behind the budget

  7. 2025-04-02 Tennessee General Assembly

    Placed on s/c cal Finance, Ways, and Means Subcommittee for 4/9/2025

  8. 2025-04-02 Tennessee General Assembly

    Assigned to s/c Finance, Ways, and Means Subcommittee

  9. 2025-04-02 Tennessee General Assembly

    Rec. for pass; ref to Finance, Ways, and Means Committee

  10. 2025-03-26 Tennessee General Assembly

    Recommended for passage, refer to Senate Finance, Ways, and Means Committee

  11. 2025-03-26 Tennessee General Assembly

    Placed on cal. Insurance Committee for 4/1/2025

  12. 2025-03-25 Tennessee General Assembly

    Action def. in Insurance Committee to 4/1/2025

  13. 2025-03-19 Tennessee General Assembly

    Placed on Senate Health and Welfare Committee calendar for 3/26/2025

  14. 2025-03-19 Tennessee General Assembly

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

  15. 2025-03-18 Tennessee General Assembly

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

  16. 2025-03-12 Tennessee General Assembly

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

  17. 2025-03-04 Tennessee General Assembly

    Sponsor(s) Added.

  18. 2025-03-04 Tennessee General Assembly

    Recommended for passage, refer to Senate Health and Welfare Committee

  19. 2025-02-27 Tennessee General Assembly

    Sponsor(s) Added.

  20. 2025-02-26 Tennessee General Assembly

    Sponsor(s) Added.

  21. 2025-02-25 Tennessee General Assembly

    Placed on Senate Commerce and Labor Committee calendar for 3/4/2025

  22. 2025-02-25 Tennessee General Assembly

    Placed on Senate Commerce and Labor Committee calendar for 3/4/2025

  23. 2025-02-25 Tennessee General Assembly

    Sponsor(s) Added.

  24. 2025-01-28 Tennessee General Assembly

    Assigned to s/c Tenncare Subcommittee

  25. 2025-01-27 Tennessee General Assembly

    Passed on Second Consideration, refer to Senate Commerce and Labor Committee

  26. 2025-01-27 Tennessee General Assembly

    P2C, ref. to Insurance Committee

  27. 2025-01-23 Tennessee General Assembly

    Sponsor(s) Added.

  28. 2025-01-21 Tennessee General Assembly

    Sponsor(s) Added.

  29. 2025-01-16 Tennessee General Assembly

    Sponsor(s) Added.

  30. 2025-01-16 Tennessee General Assembly

    Introduced, Passed on First Consideration

  31. 2025-01-16 Tennessee General Assembly

    Sponsor(s) Added.

  32. 2025-01-16 Tennessee General Assembly

    Intro., P1C.

  33. 2025-01-15 Tennessee General Assembly

    Filed for introduction

  34. 2025-01-15 Tennessee General Assembly

    Filed for introduction

Official Summary Text

Present law requires hospitals that provide services to TennCare enrollees to be reimbursed from state funds based on corridor rates set by this state's actuary and approved by the bureau of TennCare
("bureau").

REIMBURSEMENT

This bill adds to the present law by providing
t
he minimum and maximum level for aggregate rates

for services to TennCare enrollees to a
rural
hospital
. A rural hospital is one in
an area that is not delineated as an urbanize
d area by the federal census bureau
and has
no more than 49 licensed beds
. Such aggregate rates
for TennCare enrollees at rural hospitals must be based on the percentages of the rural hospital's current medicare reimbursement
.
For routine, nonspecialized
inpatient services, the minimum level of reimbursement to the hospital is 10
0%
and the maximum level is 120
%.
The
director of TennCare
may seek a federal waiver or other authorization deemed necessary to implement
such percentages of reimbursement
withou
t requiring the expansion of medicaid.

MS-DRG LIST

Present law requires the bureau to publish the list of MS-DRGs included in each service category on its website, and the bureau must update the list annually to reflect all changes as necessary. Genera
lly, MS-DRG is a classification system used by medicare to determine hospital payments based on inpatient hospital stay categories such as diagnosis, severity, and resource utilization. This bill requires the bureau to also annually furnish an updated li
s
t of MS-DRGs directly to participating rural hospitals.

Current Bill Text

Read the full stored bill text 
HOUSE BILL 173
By Martin B

SENATE BILL 185
By Jackson

SB0185
001616
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 63;
Title 68 and Title 71, Chapter 5, relative to hospital
reimbursement.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 71-5-161(d), is amended by
designating the existing language as subdivision (d)(1) and adding the following new subdivision
(d)(2):
(2)
(A) As used in this subdivision (d)(2):
(i) ''Rural area'' means an area that is not delineated as an
urbanized area by the federal census bureau; and
(ii) ''Rural hospital'' means a hospital with no more than forty-nine
(49) licensed beds, operating in a rural area.
(B) The minimum and maximum level for aggregate rates to rural
hospitals for services to TennCare enrollees must be based on the percentages
of each rural hospital's current FFY medicare reimbursement set forth in
subdivision (d)(2)(C).
(C) For routine, nonspecialized inpatient services at rural hospitals, the
minimum level of reimbursement is one hundred percent (100%) and the
maximum level is one hundred twenty percent (120%).
(D) The director of TennCare may seek a federal waiver or other
authorization the director deems necessary to implement subdivision (d)(2)(C),
without requiring the expansion of medicaid.

- 2 - 001616

SECTION 2. Tennessee Code Annotated, Section 71-5-161, is amended by deleting
subsection (e) and substituting:
(e) The bureau shall publish the list of MS-DRGs included in each service
category on its website, and the bureau shall update the list annually to reflect all
changes as necessary. The bureau shall annually furnish an updated list of MS-DRGs
directly to participating rural hospitals.
SECTION 3. This act takes effect upon becoming a law, the public welfare requiring it.