All Roll Calls
Yes: 183 • No: 0
TennesseeHB 1867114th General Assembly (2025-2026)HouseWALLET
AN ACT to amend Tennessee Code Annotated, Title 71, Chapter 5, relative to the annual coverage assessment.
Sponsored By: Gary Hicks, Gary (Republican)
Became Law
TennCare
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Bill Overview
Analyzed Economic Effects
4 provisions identified: 1 benefits, 1 costs, 2 mixed.
Hospitals pay 2026–27 TennCare assessment
The law charges covered hospitals an annual assessment for FY 2026–2027 equal to 6% of the federally recognized base. A covered hospital is one licensed under Titles 33 or 68 as of July 1, 2026, with exemptions for critical access, rural emergency, state mental health, hospitals without an EMTALA emergency department, and certain public‑expenditure certifiers. Each hospital’s base is its 2021 net patient revenue minus Medicare net revenue, with set fallbacks if a full 2021 report is missing. The total is split by weighted categories (like children’s, tier 1–3, psychiatric, safety net); TennCare can adjust the category percentages to meet federal rules or new state funding. Installments are due 15 days after CMS‑approved directed payments are made; the state sends a notice and return form at least 30 days before each due date (but payment is still due even if a notice is not received). Late payments cost $500 per day; the state can suspend certain payments after 30 days late, report the issue to the licensing agency, and sue in Davidson County chancery court. The bill prorates the charge if a hospital closes or becomes exempt mid‑year, makes sellers and buyers split responsibility when a hospital is sold, and makes the controlling person liable if a hospital closes owing money.
CMS approvals, pauses, and oversight
The program runs only with needed federal approvals. If CMS stops or limits approvals, the state must pause hospital‑directed payments and later assessment installments, and TennCare must set new payment methods and priorities by rule (including emergency rules if needed). Directed payments are capped at CMS‑approved amounts and, under the alternate path, at the FY 2024 level until full approvals and notice. TennCare must change managed‑care contracts, file state plan and waiver changes with CMS, and send quarterly reports on approvals, fund balance, and fund use. The Comptroller may audit the fund, and the law removes § 71‑5‑161 on July 1, 2026.
Trust fund for hospital payments
All assessment money goes into the Maintenance of Coverage Trust Fund, and it cannot be moved to the state’s general fund. TennCare uses the fund, with federal matches, for hospital directed payments (like quality and uncompensated care), to keep at least $48 million for medical training, and for items such as $612,007 for emergency care for toddlers and $3 million for critical access hospital charity care. Hospitals can get proportional refunds if assessments or penalties were paid by mistake or later set too high. Intergovernmental transfers into the fund are capped at $300 million, with shares based on 2021 Medicaid days and outpatient payments. The fund can also pay $382,400 for six state staff and $1.6 million for a program manager, and it remains in place after July 1, 2027 to carry out these uses.
Hospitals can’t add patient surcharges
Hospitals cannot raise prices or add a surcharge because of this assessment. A covered hospital, or a hospital association with 30 or more covered members, can ask the state for a formal ruling on compliance.
Sponsors & Cosponsors
Sponsor
Gary Hicks, Gary
Republican • House
Cosponsors
Rebecca K. Alexander, Rebecca K.
Republican • House
Michael Hale, Michael
Republican • House
William Lamberth, William
Republican • House
Roll Call Votes
Senate vote • 4/15/2026
FLOOR VOTE: Third Consideration 4/15/2026
Yes: 33 • No: 0
House vote • 4/6/2026
HOUSE CALENDAR & RULES COMMITTEE
Yes: 0 • No: 0
House vote • 4/6/2026
FLOOR VOTE: REGULAR CALENDAR AS AMENDED PASSAGE ON THIRD CONSIDERATION 4/6/2026
Yes: 92 • No: 0
House vote • 3/31/2026
HOUSE FINANCE, WAYS, AND MEANS COMMITTEE
Yes: 25 • No: 0
House vote • 3/25/2026
HOUSE FINANCE, WAYS, AND MEANS SUBCOMMITTEE
Yes: 12 • No: 0
House vote • 3/17/2026
HOUSE INSURANCE COMMITTEE
Yes: 16 • No: 0
House vote • 3/3/2026
HOUSE TENNCARE SUBCOMMITTEE
Yes: 5 • No: 0
Actions Timeline
Pub. Ch. 991
5/26/2026Effective date(s) 07/01/2026
5/26/2026Signed by Governor.
5/19/2026Transmitted to Governor for his action.
5/7/2026HouseSigned by Senate Speaker
5/5/2026SenateSigned by H. Speaker
4/30/2026HouseEnrolled; ready for sig. of H. Speaker.
4/20/2026HouseSenate substituted House Bill for companion Senate Bill.
4/15/2026SenateAmendment withdrawn. (Amendment 1 - SA0536)
4/15/2026SenatePassed Senate, Ayes 33, Nays 0
4/15/2026SenateReceived from House, Passed on First Consideration
4/9/2026SenateH. adopted am. (Amendment 1 - HA0698)
4/6/2026HouseSponsor(s) Added.
4/6/2026HousePassed H., as am., Ayes 92, Nays 0, PNV 0
4/6/2026HouseEngrossed; ready for transmission to Sen.
4/6/2026HouseH. Placed on Regular Calendar for 4/6/2026
4/2/2026HouseSponsor(s) Added.
4/2/2026HousePlaced on cal. Calendar & Rules Committee for 4/2/2026
4/1/2026HouseRec. for pass; ref to Calendar & Rules Committee
3/31/2026HouseRec. for pass by s/c ref. to Finance, Ways, and Means Committee
3/25/2026HousePlaced on cal. Finance, Ways, and Means Committee for 3/31/2026
3/25/2026HousePlaced on s/c cal Finance, Ways, and Means Subcommittee for 3/25/2026
3/18/2026HouseRec. for pass. if am., ref. to Finance, Ways, and Means Committee
3/17/2026HouseAssigned to s/c Finance, Ways, and Means Subcommittee
3/17/2026HousePlaced on cal. Insurance Committee for 3/17/2026
3/11/2026House
Bill Text
HA0698 (Substitute)
4/6/2026
Enrolled / Public Chapter
Fiscal Note
Introduced
SA0536
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