Tennessee Senate Bill SB0577

Tennessee 2025-2026 Regular Session

• Introduced: 1/30/25
• Engrossed: 3/13/25
• Enrolled: 3/25/25
• Passed: 4/3/25
• Chaptered: 4/8/25

Caption

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

Summary

SB 577 amends Tennessee’s Medicaid-related annual coverage assessment provisions in Title 71, Chapter 5. The bill creates a new rule for situations where most of the required federal CMS determinations, approvals, and confirmations have been obtained, but one specified approval is still pending. In that circumstance, the assessment may still be implemented and imposed under the existing statutory framework. The bill also limits how much of the assessment revenue may be used for directed payments to hospitals while that partial federal approval status exists. Those expenditures must be capped at either the FY 2024 amount authorized in 2023 Public Chapter 232 or a higher amount determined by the division in consultation with the Tennessee Hospital Association, but only up to the amount approved by CMS. This interim limit remains in place until all CMS approvals are secured and the division gives written notice to the Tennessee Hospital Association.

Impact

The bill modifies Tennessee Code Annotated § 71-5-2003 and § 71-5-2005, affecting the administration of the annual coverage assessment and the use of related funds for hospital directed payments. It gives the state a mechanism to continue the assessment before full federal approval is complete, while constraining spending on hospital payments during that interim period. The practical effect is to preserve funding flow for the Medicaid-related program and maintain hospital payment support, but under a temporary cap tied to prior-year levels and CMS-approved limits.

Sentiment

The available voting history suggests strong bipartisan support and little opposition. The Senate Health and Welfare Committee recommended passage unanimously, and both floor votes passed without any recorded nays. That pattern indicates the bill was viewed as a technical or administrative adjustment rather than a controversial policy change.

Contention

No major contention is reflected in the available materials. The only potentially sensitive issue is the balance between moving forward with the assessment before all CMS approvals are finalized and limiting directed payments to hospitals during that interim period. Any concern would likely come from stakeholders focused on federal compliance, hospital funding levels, or the timing of implementation, but the recorded votes show no visible opposition.