AN ACT to amend Tennessee Code Annotated, Title 63; Title 68 and Title 71, relative to TennCare.
SB0334, 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 so they 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 continue to track Medicare and commercial benchmarks and the CMS 2024 final rule.
The bill creates a process for providers to challenge delayed or incorrect reimbursement determinations through an administrative hearing, and it allows for additional incentive payments tied to quality of care and improved patient access, especially in rural and underserved areas. It also requires TennCare to seek any necessary federal Medicaid State Plan amendments, directs the state to pursue outside funding and use available state funds to support the changes, and requires annual reporting to legislative committees beginning in 2026. The act is not itself an appropriation, so implementation depends on specific funding in the general appropriations act.
If enacted, the bill would amend Tennessee law governing TennCare reimbursement and add a new statutory section in Title 71 establishing mandatory benchmark-based payment updates for selected Medicaid services. It would affect the Bureau of TennCare, the Department of Health, healthcare providers delivering the covered services, and Medicaid beneficiaries who may see improved access if provider participation increases. The bill also contemplates rulemaking, federal Medicaid plan changes, annual legislative reporting, and potential administrative hearings for reimbursement disputes.
The available voting history suggests favorable committee sentiment: the Senate Health and Welfare Committee recommended passage by a 9-0 vote and referred the bill onward to the Senate Finance, Ways, and Means Committee. The bill text itself frames the measure as a modernization and access improvement effort, emphasizing rural access, provider compensation, and quality outcomes. No committee transcript is available, so the record does not show detailed debate or opposition arguments.
The main policy tension is fiscal and administrative: the bill would require TennCare to raise reimbursement rates to Medicare or commercial benchmarks, which could increase state costs and require future appropriations. Another point of potential contention is implementation, including whether the state can secure federal approval, how quickly rates can be phased in, and how quality/access incentive metrics should be designed and enforced. Providers and patient advocates are likely to support the measure, while budget-focused stakeholders may question affordability and the mandate to align payments upward.