Consumer Protection

Plain English Breakdown

Checked against official source text during the last sync.

Healthcare Debt Relief Act

This bill requires healthcare facilities receiving public funds to forgive patient debts equal to those funds and notify patients about forgiven amounts.

What This Bill Does

• Requires healthcare facilities that receive public funds for uncompensated care to forgive an amount of patient debt equal to the received funds.
• Prohibits these facilities from taking legal action against patients for the forgiven portion of their debt.
• Mandates that facilities notify patients when a part of their debt is forgiven, including instructions on how to pay any remaining balance.
• Directs the health facilities commission to create rules ensuring maximum forgiveness of patient debts under this law.
• Requires an annual report from the Department of Health and TennCare on uncompensated care payments.

Who It Names or Affects

• Healthcare facilities that receive public funds for providing uncompensated care.
• Patients with outstanding medical bills who have received services covered by these funds.
• The health facilities commission, which must create rules to enforce the law.
• The Department of Health and TennCare, responsible for submitting annual reports.

Terms To Know

Uncompensated care

Healthcare services provided without payment from patients or insurance companies.

Disproportionate share hospital (DSH) payments

Federal and state funds given to hospitals that treat a high number of low-income patients.

Limits and Unknowns

• The bill did not pass in the Senate Commerce and Labor Committee.
• It is unclear how many healthcare facilities will be affected by this law.
• The exact impact on patient debt forgiveness remains to be seen.

Official Summary Text

This bill generally requires a healthcare facility that accepts public funds as compensation for losses
due to providing uncompensated care, to (i) ensure that an amount
of outstanding patient debt equal to the amount of public funds accepted is designated as satisfied, and
to (ii)
not seek a judgment or take other legal action to collect from the debtor any
portion of such debt that is so designated.

NOTIFICATION

This bill requires a
facility that accepts public funds
in the manner previously mentioned to
notify the patient whose debt has been satisfied.
The
notification must include the amount of satisf
ied patient debt, and, if applicable, instructions on how to pay the remaining balance of the patient's debt.

RULEMAKING

This bill requires the health facilities commission to make rules to establish a process for facilities that accept public funds to
use to offset uncompensated care losses to ensure that the facility maximizes the number of patients with outstanding debt that is designated as satisfied pursuant to this bill.

VIOLATIONS

This bill provides that a facility found in violation of this b
ill is subject to sanctions by the health facilities commission.

ANNUAL REPORT

This bill requires the department of health, in collaboration with the division of TennCare, to submit an annual report to the general assembly no later than January 15, 2026
, and by each January 15 thereafter. The report must include, at a minimum, a report
on all expenditures in the previous calendar year for virtual disproportionate share hospital
(DSH)
payments and for payments to hospitals for uncompensated care to chari
ty patients
,
as those categories of payments are defined in, the TennCare 1115 demonstration waiver from the federal centers for medicare and medicaid services.

Current Bill Text

HOUSE BILL 435
By Jones J

SENATE BILL 403
By Lamar

SB0403
000075
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AN ACT to amend Tennessee Code Annotated, Title 9,
Chapter 8; Title 16; Title 18; Title 20; Title 21; Title
27; Title 28; Title 29; Title 33; Title 45; Title 47;
Title 63; Title 68 and Title 71, relative to healthcare
costs.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 68, Chapter 11, Part 2, is amended by
adding the following as a new section:
(a) As used in this section, "uncompensated care" means healthcare services
rendered by a facility for which no payment was received from the patient or on behalf of
the patient.
(b) A facility that accepts public funds as compensation for losses due to
providing uncompensated care shall ensure that an amount of outstanding patient debt
equal to the amount of public funds accepted is designated as satisfied, and the facility
shall not seek a judgment or take other legal action to collect from the debtor any portion
of such debt that is so designated.
(c) A facility that accepts public funds pursuant to subsection (b) shall notify the
patient whose debt has been satisfied. Such notification must include the amount of
satisfied patient debt, and, if applicable, instructions on how to pay the remaining
balance of the patient's debt.
(d) The health facilities commission shall promulgate rules to establish a process
for facilities that accept public funds to use to offset uncompensated care losses to
ensure that the facility maximizes the number of patients with outstanding debt that is
designated as satisfied pursuant to subsection (b). The rules must be promulgated in

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accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter
5.
(e) A facility that violates this section is subject to sanctions by the health
facilities commission.
SECTION 2. Tennessee Code Annotated, Section 68-1-109, is amended by adding the
following as a new subsection:
( ) The department of health, in collaboration with the division of TennCare,
shall submit an annual report to the general assembly no later than January 15, 2026,
and by each January 15 thereafter, that includes, but is not limited to, a report on all
expenditures in the previous calendar year for virtual disproportionate share hospital
(DSH) payments and for payments to hospitals for uncompensated care to charity
patients with all of those payments being made in accordance with, and as those
categories of payments are defined in, the TennCare 1115 demonstration waiver from
the federal centers for medicare and medicaid services.
SECTION 3. This act takes effect upon becoming a law, the public welfare requiring it.