[Expires 7/1/2024]

(a) The funds generated as a result of this part must be deposited in the maintenance of coverage trust fund created by § 71-5-160, the existence of which is continued as provided in subsection (b). The fund must not be used to replace monies otherwise appropriated to the TennCare program by the general assembly or to replace monies appropriated outside of the TennCare program.
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Terms Used In Tennessee Code 71-5-2005

  • Annual coverage assessment: means the annual assessment imposed on covered hospitals as set forth in this part. See Tennessee Code 71-5-2002
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Bureau: means the bureau of TennCare. See Tennessee Code 71-5-2002
  • Charity: An agency, institution, or organization in existence and operating for the benefit of an indefinite number of persons and conducted for educational, religious, scientific, medical, or other beneficent purposes.
  • CMS: means the federal centers for medicare and medicaid services. See Tennessee Code 71-5-2002
  • Contract: A legal written agreement that becomes binding when signed.
  • Covered hospital: means a hospital licensed under title 33 or title 68, as of July 1, 2023, but does not include an excluded hospital. See Tennessee Code 71-5-2002
  • Excluded hospital: means :
    (A) A hospital that has been designated by CMS as a critical access hospital as of July 1, 2023. See Tennessee Code 71-5-2002
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
  • Statute: A law passed by a legislature.
  • Year: means a calendar year, unless otherwise expressed. See Tennessee Code 1-3-105
(b) The maintenance of coverage trust fund must continue without interruption and must be operated in accordance with § 71-5-160 and this section.
(c) The maintenance of coverage trust fund consists of:

(1) The balance of the trust fund remaining as of June 30, 2023;
(2) All annual coverage assessments received by the bureau;
(3) Investment earnings credited to the assets of the maintenance of coverage trust fund; and
(4) Penalties paid by covered hospitals for late payment of assessment installments imposed by this part or a prior statute authorizing an annual coverage assessment.
(d) Monies credited or deposited to the maintenance of coverage trust fund, together with all federal matching funds, must be available to and used by the bureau only for expenditures in the TennCare program and include the following purposes:

(1) Expenditure for benefits and services under the TennCare program, including those that would have been subject to reduction or elimination from TennCare funding for FY 2023-2024, except for the availability of one-time funding for that year only, as follows:

(A) Replacement of across-the-board reductions in covered and excluded hospital and professional reimbursement rates described in the governor’s recommended budgets since FY 2011, except for reductions that were included on a list for a given year but then funded in a subsequent year with recurring state dollars;
(B) Funding virtual DSH payments, funding payments to hospitals for uncompensated care to charity patients, and funding payments to hospitals for quality incentive arrangements, with all of those payments being made in accordance with, and as those categories of payments are defined in, the TennCare 1115 demonstration waiver from the federal centers for medicare and medicaid services to the maximum amount permitted for each category under that waiver;
(C) Maintenance of payments for graduate medical education of at least forty-eight million dollars ($48,000,000), or a successor program as approved by CMS;
(D) Maintenance of reimbursement for medicare part A crossover claims at the lesser of one hundred percent (100%) of medicare allowable or the billed amount;
(E) Avoidance of coverage limitations relative to the number of hospital inpatient days per year or the annual cost of hospital services for a TennCare enrollee;
(F) Avoidance of coverage limitations relative to the number of nonemergency outpatient visits per year for a TennCare enrollee;
(G) Avoidance of coverage limitations relative to the number of physician office visits per year for a TennCare enrollee;
(H) Avoidance of coverage limitations relative to the number of laboratory and diagnostic imaging encounters per year for a TennCare enrollee;
(I) Maintenance of coverage for occupational therapy, physical therapy, and speech therapy services;
(J) In the total amount of five hundred seventy-nine thousand four hundred thirty-eight dollars ($579,438) to maintain reimbursement at the same emergency care rate as in FY 2022-2023 for nonemergent care to children twelve (12) to twenty-four (24) months of age;
(K) In the total amount of two million seventy thousand nine hundred dollars ($2,070,900) to the bureau to offset the elimination of the provision in the TennCare managed care contractor risk agreements for hospitals as follows: CRA 2.12.9.60-Specify in applicable provider agreements that all providers who participate in the federal 340B program give TennCare MCOs the benefit of 340B pricing;
(L) In the total amount of one hundred seventy-five thousand dollars ($175,000) to offset a portion of the hospital cost of providing admissions, discharge, and transfer (ADT) messages to the TennCare bureau to support the TennCare Patient Centered Medical Home initiative;
(M) In the total amount of one million four hundred twenty-six thousand seven hundred dollars ($1,426,700) to provide funding for stipends for physicians and other healthcare providers who commit to work in designated medically underserved areas in this state; and
(N) In the amount of three million dollars ($3,000,000) to offset the unreimbursed cost of charity care for critical access hospitals to be funded from funds remaining in the trust fund as of June 30, 2023;
(2) Directed payments to hospitals to reduce unreimbursed costs incurred by covered hospitals in providing services to TennCare patients, as approved by CMS and as directed in subdivision (d)(3)(B);
(3)

(A) If CMS does not approve directed payments to hospitals to offset unreimbursed costs incurred in serving TennCare patients, but instead approves hospital supplemental pools in the TennCare waiver for that purpose, then payments required by this subdivision (d)(3) must be made from the allocated pools to covered hospitals to offset losses incurred in providing services to TennCare enrollees as set forth in this subdivision (d)(3) as first priority before any other supplemental payments authorized in the TennCare waiver are distributed;
(B) Directed payments to hospitals must be based on the claims paid to covered hospitals from the managed care organizations during each quarter of FY 2023-2024. Each covered hospital is entitled to payments for FY 2023-2024 equal to a portion of its reported TennCare revenue to help offset unreimbursed costs incurred providing care to TennCare patients. As used in this subdivision (d)(3)(B), TennCare net revenue is calculated using data from Schedule E, items (A)(1)(e) and (A)(1)(f) from the hospital’s 2021 joint annual report (JAR) filed with the department of health. The amount of the payment to covered hospitals will be based on their DSH class as prescribed in the annual directed payment pre-prints submitted to CMS, excluding state-owned hospitals. The classification of hospitals being established follows existing classifications in the TennCare DSH program and includes children’s, tier 1, tier 2 rural, tier 2 urban, tier 3, psychiatric, large safety net, small safety net, and hospitals that do not receive DSH payments;
(C) The payments required by this subdivision (d)(3) must be made in four (4) equal installments. The bureau shall provide to the Tennessee Hospital Association a schedule showing the payments to each hospital at least seven (7) days in advance of the payments;
(D) The payments required by this subdivision (d)(3) may be made by the bureau directly or by the TennCare managed care organizations with the direction to make payments to hospitals as required by this subsection (d). The payments to a hospital pursuant to this subdivision (d)(3) are not part of the reimbursement to which a hospital is entitled under its contract with a TennCare managed care organization; and
(E) If CMS does not approve of the classified structure of directed payments to offset unreimbursed TennCare costs, then payments required by this subdivision (d)(3) must be in accordance with this subdivision (d)(3)(E). Directed payments to hospitals must be based on the claims paid to covered hospitals from the managed care organizations during each quarter of FY 2023-2024. Each covered hospital is entitled to payments for FY 2023-2024 of a portion of its unreimbursed TennCare costs of providing services to TennCare enrollees. As used in this subdivision (d)(3)(E), “unreimbursed TennCare costs” means the excess of TennCare costs over TennCare net revenue. TennCare charges and net revenue are calculated using data from Schedule E, items (A)(1)(e) and (A)(1)(f) from the hospital’s 2021 joint annual report (JAR) filed with the department of health. As used in this subdivision (d)(3)(E), “TennCare costs” means the quotient of a facility’s cost-to-charge ratio, calculated as B(3) (total expenses) divided by A(3)(e) (total gross patient charges) from Schedule E of the 2021 JAR, times TennCare charges. The amount of the payment to covered hospitals must be no less than forty and eight-tenths percent (40.8%) of unreimbursed TennCare costs for all hospitals licensed by the state that reported TennCare charges and revenue and total expenses on the 2021 JAR, excluding state-owned hospitals;
(4) In addition to the items and expenditures set forth in subdivisions (d)(1)-(3), other programs and initiatives developed by the bureau, in consultation with the Tennessee Hospital Association, to offset the unreimbursed costs of providing services to TennCare enrollees and the financial consequences of the public health emergency. The state portion of the funding for programs and initiatives developed under this subdivision (d)(4) must be used to obtain federal matching funds to raise funds up to three hundred fifty million dollars ($350,000,000);
(5) Refunds, in proportion to the amount paid in, to covered hospitals based on:

(A) The payment of annual coverage assessments or penalties to the bureau through error, mistake, or a determination that the annual coverage assessment was invalidly imposed; or
(B) Circumstances where the bureau, in consultation with the Tennessee Hospital Association, has determined a lower coverage assessment would have been required to carry out the purposes of subdivisions (d)(1)-(4);
(6) Payments authorized under rules promulgated by the bureau pursuant to § 71-5-2004(j)(2); and
(7) Other programs and initiatives developed by the bureau in consultation with the Tennessee Hospital Association to offset the unreimbursed costs of providing services to TennCare enrollees and the financial consequences of the public health emergency. The state portion must be provided to obtain federal matching funds to produce up to a maximum payment of three hundred thirty-seven million forty thousand dollars ($337,040,000) in hospital assistance.
(e) The bureau shall modify the contracts with TennCare managed care organizations and otherwise take action necessary to assure the use and application of the assets of the maintenance of coverage trust fund, as described in subsection (d).
(f) The bureau shall submit requests to CMS to modify the medicaid state plan, the contractor risk agreements, and an applicable Section 1115 demonstration project, as necessary, to implement this part.
(g) At quarterly intervals beginning September 1, 2023, the bureau shall submit a report to the finance, ways and means committees of the senate and the house of representatives, to the health and welfare committee of the senate, to the health committee of the house of representatives, and to the legislative librarian. The report must include:

(1) The status, if applicable, of the determination and approval by CMS set forth in § 71-5-2003(b) of the annual coverage assessment;
(2) The balance of funds in the maintenance of coverage trust fund; and
(3) The extent to which the maintenance of coverage trust fund has been used to carry out this part.
(h) Notwithstanding another law, no part of the maintenance of coverage trust fund must be diverted to the general fund or used for a purpose other than as set forth in this part.
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