Tennessee legislation · 114th General Assembly
Tennessee SB1797: AN ACT to amend Tennessee Code Annotated, Title 56; Title 68, Chapter 11 and Title 71, Chapter 5, relative to managed care organizations.
Status: Chaptered, May 26, 2026
Fiscal Summary STATE GOVERNMENTEXPENDITURESGeneral FundFY26-27 & Subsequent Years$205,100Total Positions Required: 6 FEDERAL GOVERNMENTEXPENDITURES FY26-27 & Subsequent Years$357,500 Bill Summary Present law requires a managed care organization ("MCO") to contract with any nursing home that is licensed in this state and is certified by the bureau of TennCare ("bureau") to provide medicaid nursing facility services pursuant to an approved preadmission evaluation ("qualified nursing facility") to provide such services under the same terms and conditions as are offered by any other participating facility contracted with that MCO to provide the same service under any policy, contract, or plan that is part of the TennCare managed long-term care service delivery system. As used in present law, a "managed care organization" means a health maintenance organization, behavioral health organization, or managed health insurance issuer that has a contract with the bureau and participates in the TennCare program. This bill prohibits an MCO from adopting any participation requirements, network admission criteria, or termination standards for a qualified nursing facility beyond those established by the bureau. However, the MCO may enforce other contractual provisions that do not affect the facility's participation status. This bill gives the bureau the exclusive authority to determine whether a qualified nursing facility may be terminated from participation in the TennCare program, including the termination of a qualified nursing facility's contract with an MCO. An MCO is generally prohibited from suspending, denying, refusing to review, terminating, or otherwise taking any action resulting in the actual or constructive termination of a qualified nursing facility contract. However, this does not apply if (i) the bureau has taken a fi
What the bill says
From the amended text:
Senate Commerce and Labor 1 Amendment No. 1 to SB1797 Bailey Signature of Sponsor AMEND S e n ate Bill No. 1797* House Bill No. 2093 by deleting all language after the enacting clause and substituting: SECTION 1. Tennessee Code Annotated, Section 71-5-1412, is amended by inserting the following immediately preceding the existing subsection (a) as new subsections (a) and (b), and redesignating the existing subsections (a) and (b) accordingly: (a) As used in this (2) "Managed care organization" or "MCO" means a health maintenance organization, behavioral health organization, or managed health insurance issuer that has a contract with the bureau and participates in the TennCare program; (3) "Qualified nursing facility" means a nursing home that is licensed under title 68, chapter 11, part 2, and is certified by the bureau to provide medicaid nursing facility services; and (4) "Termination": (A) Means the involuntary removal, exclusion, or non-renewal of a qualified medicaid provider from an MCO's provider network or the medicaid program; and (B) Does not include the voluntary withdrawal by the qualified medicaid provider. (b) A managed care organization shall not include a provision in the MCO's contract with a qualified nursing facility to provide medicaid nursing facility services that permit actual or constructive termination by the MCO without cause, for convenience, or SA1003 termination without specifying the grounds …