Bill > SB1939

This bill, titled the "Annual Coverage Assessment Act of 2026," establishes a new assessment on "covered hospitals" (hospitals licensed under specific titles, excluding certain types like critical access or state-owned mental health hospitals) to fund healthcare services. The assessment is calculated based on each hospital's "annual coverage assessment base," which is generally their net patient revenue minus Medicare net revenue from a specific fiscal year, with detailed provisions for how this base is determined for various hospital situations. The total assessment collected from all covered hospitals will equal six percent of the federally recognized annual coverage assessment base. The funds generated will be deposited into a "maintenance of coverage trust fund" and used for specific purposes, including maintaining or expanding healthcare benefits and services, making directed payments to hospitals for services to TennCare patients and the uninsured, and covering administrative costs. The bill outlines conditions for the assessment to become effective, including federal approval from the Centers for Medicare & Medicaid Services (CMS) and specifies penalties for non-payment, such as suspension of payments and potential license deficiencies. Importantly, the bill also includes provisions to prevent managed care organizations from implementing across-the-board rate reductions to hospitals and physicians due to this assessment, while allowing for good-faith negotiations. The government-provided summary notes that this bill allows the division to submit its annual report on the assessment to finance and health committees more frequently than quarterly.