TennesseeSB 0576114th General Assembly (2025-2026)SenateWALLET

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

Sponsored By: Ferrell Haile (Republican)

Became Law

TennCare

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Bill Overview

Analyzed Economic Effects

6 provisions identified: 1 benefits, 0 costs, 5 mixed.

Funding to support pediatric care rates

The law provides $598,945 to keep the FY 2024–2025 emergency‑care rate for nonemergency care for children ages 12–24 months. It also raises a listed program amount from $2,111,400 to $2,140,620, an increase of $29,220.

Prorated hospital charges and transfer rules

If a covered hospital closes or becomes excluded between July 1, 2025, and June 30, 2026, its assessment is prorated to the days it was covered. When a hospital switches between excluded and covered, intergovernmental transfers and assessments apply in proportion to time spent in each status. Transfer amounts use each hospital’s Medicaid days and outpatient payments from the 2021 Joint Annual Report.

Hospital assessment timing and payments set

The law moves the hospital assessment to FY 2025–2026 and uses July 1, 2025, for status dates. The Division can start the assessment even if one specific federal CMS approval is still pending, once all other required CMS approvals are in place. Hospitals pay in equal installments across FY 2025–2026, with each due 15 days after CMS‑approved directed payments to hospitals are made. The program remains in effect through July 1, 2026. The date to decide if a hospital is covered or excluded shifts from July 1, 2024, to July 1, 2025.

Lower floor and new hospital data year

For FY 2025–2026, the minimum distribution floor drops from 37% to 36%. Calculations now use 2023 Joint Annual Report data instead of 2022. This changes how money is split among hospitals.

Temporary cap on hospital directed payments

While the assessment runs under early‑implementation rules, directed payments to hospitals are capped. The cap is the FY 2024 amount or a higher amount set by the Division with the Hospital Association, up to what CMS approves. The cap ends after all required CMS approvals are secured and the Division gives written notice.

New data sources for hospital assessments

The Division may use a hospital’s certificate‑of‑need filing or an equivalent financial report on file with the licensing agency to set the assessment. This can change reporting steps and may change the assessed amount for some hospitals.

Sponsors & Cosponsors

Sponsor

Ferrell Haile
Republican • Senate

Cosponsors

Ed Jackson
Republican • Senate

Roll Call Votes

All Roll Calls

Yes: 146 • No: 0

House vote • 4/14/2025

FLOOR VOTE: REGULAR CALENDAR PASSAGE ON THIRD CONSIDERATION 4/14/2025

Yes: 96 • No: 0

Senate vote • 4/14/2025

FLOOR VOTE: as Amended Third Consideration 4/14/2025

Yes: 32 • No: 0

Senate vote • 4/8/2025

SENATE FINANCE, WAYS AND MEANS COMMITTEE

Yes: 9 • No: 0

Senate vote • 3/12/2025

SENATE HEALTH AND WELFARE COMMITTEE