Hospitals and Health Care Facilities - As enacted, enacts the "Annual Coverage Assessment Act of 2017." - Amends TCA Title 71, Chapter 5 and Chapter 854 of the Public Acts of 2016.
Companion bill has been assigned Public Chapter Number 364 by the Secretary of State.
  • Bill History
  • Amendments
  • Video
  • Summary
  • Fiscal Note
  • Votes
  • Actions For SB0214Date
    Comp. became Pub. Ch. 36405/22/2017
    Sponsor(s) Added.05/03/2017
    Companion House Bill substituted05/03/2017
    Placed on Senate Regular Calendar calendar for 5/3/201705/01/2017
    Recommended for passage, refer to Senate Calendar Committee04/25/2017
    Placed on Senate Finance, Ways, and Means Committee calendar for 4/25/201704/24/2017
    Rule #83(8) Suspended, to be heard in S. FW&M Comm. 4-25-1704/24/2017
    Recommended for passage with amendment/s, refer to Senate Finance, Ways, and Means Committee Ayes 7, Nays 0 PNV 004/05/2017
    Placed on Senate Health and Welfare Committee calendar for 4/5/201703/29/2017
    Action deferred in Senate Health and Welfare Committee to 4/5/201703/29/2017
    Placed on Senate Health and Welfare Committee calendar for 3/29/201703/23/2017
    Passed on Second Consideration, refer to Senate Health and Welfare Committee02/02/2017
    Introduced, Passed on First Consideration02/01/2017
    Filed for introduction01/30/2017
    Actions For HB0647Date
    Pub. Ch. 36405/22/2017
    Effective date(s) 07/01/201705/22/2017
    Signed by Governor.05/11/2017
    Transmitted to Governor for his action.05/09/2017
    Signed by Senate Speaker05/09/2017
    Signed by H. Speaker05/04/2017
    Enrolled; ready for sig. of H. Speaker.05/03/2017
    Passed Senate, Ayes 31, Nays 005/03/2017
    Amendment withdrawn. (Amendment 1 - SA0317)05/03/2017
    Senate substituted House Bill for companion Senate Bill.05/03/2017
    Received from House, Passed on First Consideration05/03/2017
    Engrossed; ready for transmission to Sen.05/02/2017
    Passed H., as am., Ayes 81, Nays 1, PNV 105/01/2017
    H. adopted am. (Amendment 1 - HA0371)05/01/2017
    H. Placed on Regular Calendar for 5/1/201704/27/2017
    Placed on cal. Calendar & Rules Committee for 4/27/201704/26/2017
    Rec. for pass; ref to Calendar & Rules Committee04/25/2017
    Placed on cal. Finance, Ways & Means Committee for 4/25/201704/19/2017
    Rec. for pass by s/c ref. to Finance, Ways & Means Committee04/19/2017
    Placed on s/c cal Finance, Ways & Means Subcommittee for 4/19/201704/12/2017
    Assigned to s/c Finance, Ways & Means Subcommittee04/12/2017
    Rec. for pass. if am., ref. to Finance, Ways & Means Committee04/11/2017
    Placed on cal. Health Committee for 4/11/201704/05/2017
    Action def. in Health Committee to 4/11/201704/04/2017
    Placed on cal. Health Committee for 4/4/201703/29/2017
    Rec for pass if am by s/c ref. to Health Committee03/29/2017
    Placed on s/c cal Health Subcommittee for 3/29/201703/22/2017
    Assigned to s/c Health Subcommittee02/14/2017
    P2C, ref. to Health Committee02/13/2017
    Intro., P1C.02/09/2017
    Filed for intro.02/08/2017
  • AmendmentsFiscal Memos
    SA0317Amendment 1-1 to SB0214Fiscal Memo for SA0317 (4761)  
    AmendmentsFiscal Memos
    HA0371Amendment 1-1 to HB0647Fiscal Memo for HA0371 (4761)  

    NOTE: Each fiscal memorandum applies only to the amendment(s) identified in the memorandum. The fiscal memorandum must be matched to any amendments that have been adopted.

  • Videos containing keyword: SB0214

  • Fiscal Summary

    Increase State Revenue - $446,590,600/FY17-18/ Maintenance of Coverage Trust Fund Increase State Expenditures - $446,590,600/FY17-18/ Maintenance of Coverage Trust Fund Increase Federal Expenditures - $851,826,400/FY17-18/ Maintenance of Coverage Trust Fund Revenue recognition in the amount of $446,590,600 is included in the Governors proposed FY17-18 budget (page A-37). Corresponding non-recurring appropriations in the amount of $1,298,417,000 ($446,590,600 in state funds and $851,826,400 in federal matching funds) are also included.


    Bill Summary

    Generally under present law, an annual assessment is imposed on licensed, covered hospitals. A covered hospital is one licensed by the state for the provision of providing services for health care, mental health care, substance abuse, and intellectual and developmental disabilities, but does not include:

    (1) A hospital that has been designated by CMS as a critical access hospital;
    (2) A mental health hospital owned by the state of Tennessee;
    (3) A hospital providing primarily rehabilitative or long-term acute care services;
    (4) A children's research hospital that does not charge patients for services beyond that reimbursed by third-party payors; and
    (5) A hospital that is determined by the bureau of TennCare as eligible to certify public expenditures for the purpose of securing federal medical assistance percentage payments.

    This bill imposes on each covered licensed hospital in this state, an annual coverage assessment for fiscal year 2017-2018. The annual assessment will be 4.52 percent of a covered hospital's annual coverage assessment base.

    ON MAY 1, 2017, THE HOUSE ADOPTED AMENDMENT #1 AND PASSED HOUSE BILL 647, AS AMENDED.

    AMENDMENT #1 adds the details of the annual coverage assessment that this bill imposes on covered hospitals for fiscal year (FY) 2017-2018.

    Generally, the assessment is annually imposed to pay for benefits and services under the TennCare program that otherwise would have been subject to reduction or elimination from TennCare funding and for payments to hospitals for FY 2-17-2018 of a portion of its unreimbursed cost of providing services to TennCare enrollees.

    IMPOSITION OF ASSESSMENT

    This amendment imposes on each covered hospital licensed as of the bill's effective date an annual coverage assessment for FY 2017-2018. A "covered hospital" means any hospital licensed under present law regarding health or mental health and developmental disabilities, except for the following:

    (1) A hospital that has been designated by the federal centers for Medicare and Medicaid services (CMS) as a critical access hospital;
    (2) A mental health hospital owned by the state of Tennessee;
    (3) A hospital providing primarily rehabilitative or long term acute care services;
    (4) A children's research hospital that does not charge patient for services beyond that reimbursed by third party payors; and
    (5) A hospital that is determined by the bureau of TennCare as eligible to certify public expenditures for the purpose of securing federal medical assistance percentage payments.

    The amount of the annual coverage assessment will be 4.52 percent of a covered hospital's annual coverage assessment base, to be paid installments. "Annual coverage assessment base" is a covered hospital's net patient revenue as shown in its Medicare cost report for its fiscal year that ended during calendar year 2008 on file with CMS as of September 30, 2009, subject to certain qualifications as detailed in the amendment. Such annual coverage assessment will not be effective or imposed until the bureau of TennCare has provided the Tennessee Hospital Association with written notice that includes:

    (1) A determination from CMS that the assessment is a permissible source of revenue that does not adversely affect the amount of federal financial participation in the TennCare program;
    (2) Either: approval from CMS for the distribution of the full amount of directed payments to hospitals to offset unreimbursed TennCare costs as described below; approval from CMS for the distribution of the full amount of funds for uncompensated hospital costs set forth in the extension of the section 1115 demonstration project; or the rules proposed by the bureau pursuant to this bill; and
    (3) Confirmation that all contracts between hospitals and managed care organizations comply with the hospital rate variation corridors.

    Additionally, the annual coverage assessment will not be effective if the coverage or the amount of revenue available for expenditure by TennCare in FY 2017-2018 is less than the governor's FY 2017-2018 recommended budget level, plus additional appropriations made by the general assembly to the TennCare program for FY 2017-2018, except to the extent new federal funding is available to replace funds that are appropriated in the governor's recommended budget and that are above the amount that the state receives from CMS under the regular federal matching assistance percentage.

    For rates in effect on July 1, 2017, the bureau must prohibit the managed care organizations from implementing across-the-board rate reductions to covered or excluded network hospitals or physicians either by category or type of provider.

    Failure of a covered hospital to pay an installment of the annual coverage assessment when due will result in an imposition of a penalty of $500 per day until the installment is paid in full. If a covered hospital ceases operation prior to payment of its full annual coverage assessment, then the persons controlling the hospital as of the date the hospital ceased operation would be jointly and severally responsible for any remaining assessment installments and unpaid penalties associated with previous late payments. If a covered hospital fails to pay an installment of the coverage assessment within 30 days of its due date, the bureau will suspend the payments to the hospital. Failure of a covered hospital to pay a installment of the coverage assessment or any refund required by this bill will be considered a license deficiency and grounds for disciplinary action. Additionally, the bureau may file a civil action in the chancery court for Davidson County against a covered hospital and its controlling persons to collect delinquent coverage assessment installments, late penalties and refund obligations.

    Under this amendment, if any federal agency with jurisdiction over this annual coverage assessment determines that the annual coverage assessment is not a valid source of revenue or if there is a reduction of the coverage and funding of the TennCare program contrary to this amendment, or if the requirements of rate corridors or approval under this amendment are not fully satisfied, or if one or more managed care organizations impose rate reductions contrary to this bill, then: no subsequent installments of the annual coverage assessment will be due and payable; and no further payments will be paid to hospitals pursuant after the date of such event.

    Also, if CMS discontinues approval of or otherwise fails to approve the full amount of directed payments or unreimbursed hospital cost pool payments to hospitals to offset losses incurred from providing services to TennCare enrollees, then the bureau will suspend any payments from or to covered hospitals otherwise required by this amendment and promulgate rules that:

    (1) Establish the methodology for determining the amounts, categories, and times of payments to hospitals, if any, instead of the payments that otherwise would have been paid if approved by CMS and prioritize payments to hospitals;
    (2) Identify the benefits and services for which funds will be available in order to mitigate reductions or eliminations that otherwise would be imposed in the absence of the coverage assessment;
    (3) Determine the amount and timing of payments for identified benefits and services;
    (4) Reinstitute payments from or to covered hospitals as appropriate; and
    (5) Otherwise achieve the goals of these provisions.

    A covered hospital, or an association that includes 30 or more covered hospitals, may file a petition for declaratory order to determine if there has been a failure to satisfy one of the conditions precedent to the valid imposition of the annual coverage assessment. A covered hospital may not increase charges or add a surcharge based on the annual coverage assessment.

    MAINTENANCE OF COVERAGE TRUST FUND

    The funds generated by this bill will be deposited in the maintenance of coverage trust fund. The fund consists of the balance in the funds remaining as of June 30, 2017 and all annual coverage assessments received by the bureau and of investment earnings credited to the assets of the maintenance of coverage trust fund, as well as penalties paid by covered hospitals for late payments. Monies in the fund, together with all federal matching funds, will be used by the bureau for expenditures in the TennCare program, including:

    (1) Expenditures for benefits and services under the TennCare program that otherwise would have been subject to reduction or elimination from TennCare funding for FY 2017-2018, as detailed in this amendment;
    (2) Directed payments to hospitals to offset unreimbursed costs incurred by covered hospitals in providing services to TennCare patients, as approved by CMS;
    (3) Refunds to covered hospitals based on 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; and
    (5) Payments authorized under rules promulgated by the bureau.

    OTHER PROVISIONS

    The bureau will submit requests to CMS to modify the Medicaid state plan, the contractor risk agreements or the TennCare II Section 1115 demonstration project as necessary to implement the requirements of this amendment.

    At quarterly intervals beginning September 1, 2017, the bureau must submit a report to the finance ways and means committees of each house, the senate health and welfare committee, and the house health committee. The report must include the status of the determination and approval by CMS of the annual coverage assessment, the balance of funds in the maintenance of coverage trust fund, and the extent of which the fund has been used to carry out the provisions of this amendment.

    The bill will expire on June 30, 2018, except for the following provisions: the authority of the bureau to impose late payment penalties and to collect unpaid annual coverage assessments and required refunds; the rights of a covered hospital or an association of covered hospitals to file a petition for declaratory order to determine whether the annual coverage assessment has been validly imposed; the existence of the maintenance of coverage trust fund and the obligation of the bureau to use and apply the assets of the fund; and the obligation to implement and maintain the requirements regarding full implementation of hospital payment rate variation corridors.

  • FiscalNote for SB0214/HB0647 filed under SB0214
  • House Floor and Committee Votes

    HB0647 by McDaniel - FLOOR VOTE: AS AMENDED PASSAGE ON THIRD CONSIDERATION 5/1/2017
    Passed
              Ayes...............................................81
              Noes................................................1

              Representatives voting aye were: Alexander, Brooks H, Brooks K, Butt, Byrd, Calfee, Camper, Carr, Casada, Casada, Clemmons, Coley, Crawford, Curcio, Daniel, DeBerry, Doss, Eldridge, Faison, Farmer, Favors, Forgety, Gant, Gilmore, Goins, Halford, Hardaway, Harwell, Hawk, Hawk, Hicks, Hill M, Hill T, Holsclaw, Howell, Hulsey, Jernigan, Jones, Kane, Keisling, Kumar, Lamberth, Littleton, Lollar, Love, Matheny, Matlock, McCormick, McCormick, McDaniel, McDaniel, Miller, Mitchell, Moody, Pitts, Pody, Powell, Ragan, Ramsey, Reedy, Rogers, Rudd, Sanderson, Sargent, Sexton C, Sexton J, Shaw, Sherrell, Smith, Sparks, Stewart, Swann, Terry, Thompson, Tillis, Travis, Turner, VanHuss, Weaver, White D, White M, Whitson, Williams, Wirgau, Zachary, Madame Speaker Harwell -- 81.
              Representatives voting no were: Holt -- 1.

              HB0647 by McDaniel - HOUSE CALENDAR & RULES COMMITTEE:
    H. Placed on Regular Calendar for 5/1/2017 4/27/2017
              Voice Vote - Ayes Prevail

              HB0647 by McDaniel - HOUSE FINANCE, WAYS & MEANS COMMITTEE:
    Rec. for pass; ref to Calendar & Rules Committee 4/25/2017
              Voice Vote - Ayes Prevail

              HB0647 by McDaniel - HOUSE FINANCE, WAYS & MEANS SUBCOMMITTEE:
    Rec. for pass by s/c ref. to Finance, Ways & Means Committee 4/19/2017
              Voice Vote - Ayes Prevail

              HB0647 by McDaniel - HOUSE HEALTH COMMITTEE:
    Rec. for pass. if am., ref. to Finance, Ways & Means Committee 4/11/2017
              Voice Vote - Ayes Prevail

              HB0647 by McDaniel - HOUSE HEATH SUBCOMMITTEE:
    Rec for pass if am by s/c ref. to Health Committee 3/29/2017
              Voice Vote - Ayes Prevail

    Senate Floor and Committee Votes

    Senate moved to substitute and conform to HB0647

    HB0647 by McDaniel - FLOOR VOTE: THIRD CONSIDERATION 5/3/2017
    Passed
              Ayes...............................................31
              Noes................................................0

              Senators voting aye were: Bailey, Beavers, Bell, Bowling, Briggs, Crowe, Dickerson, Gardenhire, Gresham, Haile, Harper, Harris, Hensley, Johnson, Kelsey, Ketron, Kyle, Lundberg, Massey, McNally, Niceley, Norris, Overbey, Roberts, Southerland, Stevens, Tate, Tracy, Watson, Yager, Yarbro, Mr. Speaker McNally -- 31.

    SB0214 by Overbey - SENATE FINANCE, WAYS AND MEANS COMMITTEE:
    Recommended for passage, refer to Senate Calendar Committee 4/25/2017
    Passed
              Ayes...............................................11
              Noes................................................0

              Senators voting aye were: Dickerson, Gardenhire, Haile, Harper, Hensley, Ketron, Norris, Overbey, Stevens, Tate, Watson -- 11.

    SB0214 by Overbey - SENATE HEALTH AND WELFARE COMMITTEE:
    Recommended for passage with amendment/s, refer to Senate Finance, Ways, and Means Committee Ayes 7, Nays 0 PNV 0 4/5/2017
    Passed
              Ayes................................................7
              Noes................................................0

              Senators voting aye were: Briggs, Haile, Hensley, Jackson, Kyle, Massey, Overbey -- 7.