AN ACT to amend Tennessee Code Annotated, Title 63; Title 68 and Title 71, relative to TennCare.
HB0372, titled the Tennessee Medicaid Modernization and Access Act of 2025, would require TennCare reimbursement rates for certain “key services” to be updated in 2025 and thereafter to match either the Medicare fee schedule or the average commercial rate, whichever is higher. The bill defines key services as OB/GYN, primary care, outpatient mental health, and substance use disorder services. It also directs the Department of Health, in consultation with the Bureau of TennCare, to review rates annually and ensure they track changes in Medicare and commercial benchmarks, with the option to phase in changes for specific services if needed.
The bill further creates a process for providers to challenge delayed or erroneous reimbursement determinations through an administrative hearing, and it allows for additional incentive payments tied to quality of care and improved access, especially in rural and underserved areas. TennCare must seek any necessary federal approval to modify the state Medicaid plan, and the Department of Health and TennCare are instructed to pursue federal, private, or other available funds to support the reimbursement changes. The bill also requires annual reporting to legislative committees on fiscal effects, provider participation, access, and outcomes, and authorizes rulemaking to implement the act.
If enacted, the bill would amend Tennessee law governing TennCare and Medicaid reimbursement by imposing a new benchmark-based payment standard for selected services and by adding oversight, appeals, incentive, and reporting requirements. It would affect the Department of Health, the Bureau of TennCare, healthcare providers delivering the covered services, and state budgeting because implementation depends on appropriations and possible federal plan amendments. The bill expressly states it is not an appropriation and cannot be funded without specific appropriations in the general appropriations act.
The available committee votes suggest generally favorable sentiment toward the bill, with unanimous or near-unanimous recommendations in the House TennCare Subcommittee and House Insurance Committee, and a strong majority in the House Government Operations Committee. The bill’s stated goals of improving access, provider compensation, and outcomes in rural and underserved areas appear to have broad appeal among supporters. The lone recorded dissent in Government Operations indicates at least some concern, but the overall committee history points to substantial support.
The main points of contention are likely fiscal and administrative. The bill would require TennCare rates to rise to Medicare or commercial benchmarks for key services, which could increase state costs and depend on future appropriations, federal approval, and available funding sources. Another possible concern is the added administrative burden on the Department of Health and TennCare, including annual rate reviews, reporting, rulemaking, and an appeals process for providers. The bill’s phase-in flexibility and explicit non-appropriation language appear designed to address some of these concerns.