Tenn. Code Ann. § 71-3-503 — TN Code / Title 71 / Chapter 3 / Section 71-3-503
Program and facilities exempt from licensing
Status: in_force

(a) A program or activity that falls within the definition of a child care agency shall be exempt from the licensing requirements of this part upon demonstration of clear and convincing evidence that it meets one (1) of the following exemptions in subdivisions (a)(1)-(11), or, if no specific exemption exists in subdivisions (a)(1)-(11), there is clear and convincing evidence demonstrating that the program or activity meets the criteria of subsection (c): (1) Entities or persons licensed or otherwise regulated by other agencies of the state or federal government providing health, psychiatric or psychological care or treatment or mental health care or counseling for children while the entity or person is engaged in such licensed or regulated activity; (2) Preschool or school age child care programs, a Title I program, a school-administered head start or an even start program, and all state-approved Montessori school programs, that are subject to regulation by the department of education or other departments of state government; (3) Private or parochial kindergartens for five-year-old children if such kindergartens operate on the public school kindergarten schedule; (4) Child care centers operated by church-related schools, as defined by § 49-50-801 , which shall be subject to regulation by the department of education pursuant to title 49, chapter 1, part 11; (5) Educational programs. To qualify for an educational program exemption, a child care agency must meet the following criteria: (A) That the sole or primary purpose of the program is: (i) To prepare children for advancement to the next educational level through a prescribed course of study or curriculum that is not typically available in a department-regulated child care setting; (ii) To provide specialized tutoring services to assist children with the passage of mandatory educational proficiency examinations; or (iii) To provide education-only services to special needs children; and (B) That the program time scheduled to be dedicated to the educational activity is reasonably age appropriate for the type of activity and the ages served; (6) (A) "Parents' Day Out" or similar programs operated by a religious institution or religious organization that provide custodial care and services for children of less than school age, with no child attending more than twelve (12) hours in each calendar week; (B) Existing and all future programs shall register with the department their intent to operate a Parents' Day Out program prior to offering the service, and, as evidence of their exempt status, these programs shall maintain records that include, at a minimum, dates and times of each child's attendance; (C) The records and forms shall be made available during regular business hours to the commissioner or commissioner's designee; (D) Each separate location or campus of a religious institution or religious organization shall be considered a separate religious institution or religious organization for the purpose of Parents' Day Out or any similar program; (7) Recreational programs. To qualify for a recreational program exemption, a child care agency must meet the following criteria: (A) That the sole or primary purpose of the program or activity is to provide recreational services, e.g., organized sports or crafts activities; (B) That the sole or primary purpose of the program or activity is dedicated to recreational activities for a substantial portion of the hours of operation; (C) That the majority of program staff responsible for the direct delivery of services possesses specialized qualifications that are directly related to the recreational services being offered; (D) That at least seventy-five percent (75%) of any individual child's program time is spent engaging in the recreational activities that are reasonably age appropriate for the type of activity and the ages served; (E) That the supervision or care of children, or other types of child care-related services, is incidental to its overall purpose; and (F) That no individual child could participate in the program or activity: (i) For more than seven (7) hours per day; or (ii) If a child participates for more than seven (7) hours per day, that such child could not continue to participate for more than seven (7) consecutive weeks and for no more than one hundred twenty (120) days per calendar year; (8) Camp programs. To qualify for a camp program exemption, a child care agency must meet the following criteria: (A) That the primary purpose of the program or activity is to provide intensive recreational, religious, outdoor or other activities that are not routinely available in full-time child care; (B) That the program or activity operates exclusively during the summer months and less than ninety (90) days in any calendar year; and (C) That the enrollment periods for participation in the program or activity clearly define the duration of the program or activity and exclude drop-in child care; (9) (A) "Casual care" operations consisting of places or facilities operated by any person or entity that provides child care, at the same time, for a minimum of five (5) children, but less than fifteen (15) children, who are not related to the primary caregiver, during short periods of time that do not exceed ten (10) hours per week or six (6) hours per day for any individual child while the parents or other custodians of the children are engaged in short-term activities, not including employment of the parent or other custodian of the child; (B) These operations shall register with the department their intent to conduct casual care of children, and, as evidence of their exempt status, these operations shall maintain records that include, at a minimum, the children's names, ages, addresses, dates and times of attendance, the parents' or custodians' names, addresses, and intended whereabouts while the children are in care, and the telephone numbers of persons to contact in the event of an emergency. All records shall be made available at any time to any authorized representative of the department; (C) Failure to comply with the requirements of this subdivision (a)(9) shall subject the violator to a civil penalty by the department not to exceed five hundred dollars ($500) for the first violation and not to exceed one thousand dollars ($1,000) for subsequent violations, and the department may seek injunctive relief in the chancery or circuit court of the county where the place or facility is located to prevent further operation of the place or facility or to obtain entry to conduct any inspection of the operation; (10) (A) Any program or facility operated by, or in affiliation with, any Boys and Girls Club that provides care for school-aged children and that holds membership in good standing with Boys and Girls Clubs of America and that is certified as being in compliance with the purposes, procedures, voluntary standards and mandatory requirements of Boys and Girls Clubs of America; (B) Any such Boys and Girls Club that applies to participate in state or federally funded programs that require child care licensing by the state as a term of eligibility may elect to apply to the department for child care licensing and regulation. Upon meeting departmental standards, the Boys and Girls Club may be licensed as a child care center/provider; (C) The department is hereby authorized to grant a waiver from any rule concerning grouping of children and adult/child ratios for child care centers to any Boys and Girls Club that falls within both subdivisions (a)(11)(A) and (a)(10)(A) and (B), and that is providing after-school child care to mixed groups of school-aged children; and (11) Nurseries, babysitting services and other children's activities that are not ordinarily operated on a daily basis, but are associated with religious services or related activities of churches or other houses of worship. Such services or activities may include limited special events that shall not exceed fourteen (14) days in any calendar year. (b) (1) Exempt programs under subdivisions (a)(3), (6) and (9) shall post a sign stating, "This facility is not required to be licensed by the state as a child care agency." (2) When a parent, custodian or guardian initially registers a child with an exempt program under subdivisions (a)(3), (6) and (9), which is required to post a sign pursuant to this subsection (b), the parent, custodian or guardian shall sign a form indicating that the parent, custodian or guardian has been advised and understands that the program is not licensed and is not required to be licensed by the state as a child care agency. The same language that is required to be placed on the sign shall be printed on such form at least in 16-point type with a signature line for the parent, custodian or guardian immediately following such language. The signed form shall be maintained with the records of the exempt entity. (c) In analyzing whether the program or activity is exempt pursuant to this section, unless the department determines upon clear and convincing evidence that the program or activity qualifies for an exemption based upon the criteria set forth in subdivisions (a)(1)-(11), the department shall consider the following nonexclusive criteria to determine if the program or activity is clearly distinguishable from child care services typically regulated by the department and otherwise qualifies for exemption from licensing: (1) The sole or primary purpose of the program or activity is to provide specialized opportunities for the child's educational, social, cultural, religious or athletic development, or to provide the child with mental or physical health services; (2) The time period in which the program or activity provides these opportunities is consistent with a reasonable time period for the completion of the program or activity, considering the age of each child served and the nature of the program; (3) The primary purpose of the program or activity is not routinely available or could not be made routinely available in the typical child care settings regulated by the department; (4) Parents could reasonably be expected to choose the program or activity because of the unique nature of what it offers, rather than as a substitute for full-time, before or after school, holiday or weather-related child care; and (5) If the program or activity is regulated by any other federal, state or local agency, it is required by such other agency to comply with standards that substantially meet or exceed department licensing regulations. (d) (1) The department shall not be required to grant exemptions to programs or activities that offer otherwise exempt opportunities or services as a mere component of a program or activity that the department determines primarily constitutes substitute child care. (2) No program or activity shall be exempt from licensing solely for the reason that the care and supervision of children that constitutes child care is offered only on a part-time or periodic basis. (3) Exemption from licensure does not exempt the program or activity from compliance with any other local, state or federal requirements. (e) A child care agency claiming an exemption pursuant to this section may submit to the department's licensing director, or designee, a sworn, written request for exemption in such manner and form as the department may require. The request shall provide a detailed description of the operation of the program or activity, the program's or activity's purpose and the applicant's basis for claiming an exemption. The department shall provide a written response to the exemption request stating the reasons the exemption was granted or denied. Amended by 2021 Tenn. Acts, ch. 162, s 1, eff. 7/1/2021. Amended by 2013 Tenn. Acts, ch. 72, Secs.s 1, s 2 eff. 4/1/2013. Acts 2000, ch. 981, § 4; 2001, ch. 453, § 7; 2005, ch. 151, §§ 8 - 12.
(a) A program or activity that falls within the definition of a child care agency shall be exempt from the licensing requirements of this part upon demonstration of clear and convincing evidence that it meets one (1) of the following exemptions in subdivisions (a)(1)-(11), or, if no specific exemption exists in subdivisions (a)(1)-(11), there is clear and convincing evidence demonstrating that the program or activity meets the criteria of subsection (c): (1) Entities or persons licensed or otherwise regulated by other agencies of the state or federal government providing health, psychiatric or psychological care or treatment or mental health care or counseling for children while the entity or person is engaged in such licensed or regulated activity; (2) Preschool or school age child care programs, a Title I program, a school-administered head start or an even start program, and all state-approved Montessori school programs, that are subject to regulation by the department of education or other departments of state government; (3) Private or parochial kindergartens for five-year-old children if such kindergartens operate on the public school kindergarten schedule; (4) Child care centers operated by church-related schools, as defined by § 49-50-801 , which shall be subject to regulation by the department of education pursuant to title 49, chapter 1, part 11; (5) Educational programs. To qualify for an educational program exemption, a child care agency must meet the following criteria: (A) That the sole or primary purpose of the program is: (i) To prepare children for advancement to the next educational level through a prescribed course of study or curriculum that is not typically available in a department-regulated child care setting; (ii) To provide specialized tutoring services to assist children with the passage of mandatory educational proficiency examinations; or (iii) To provide education-only services to special needs children; and (B) That the program time scheduled to be dedicated to the educational activity is reasonably age appropriate for the type of activity and the ages served; (6) (A) "Parents' Day Out" or similar programs operated by a religious institution or religious organization that provide custodial care and services for children of less than school age, with no child attending more than twelve (12) hours in each calendar week; (B) Existing and all future programs shall register with the department their intent to operate a Parents' Day Out program prior to offering the service, and, as evidence of their exempt status, these programs shall maintain records that include, at a minimum, dates and times of each child's attendance; (C) The records and forms shall be made available during regular business hours to the commissioner or commissioner's designee; (D) Each separate location or campus of a religious institution or religious organization shall be considered a separate religious institution or religious organization for the purpose of Parents' Day Out or any similar program; (7) Recreational programs. To qualify for a recreational program exemption, a child care agency must meet the following criteria: (A) That the sole or primary purpose of the program or activity is to provide recreational services, e.g., organized sports or crafts activities; (B) That the sole or primary purpose of the program or activity is dedicated to recreational activities for a substantial portion of the hours of operation; (C) That the majority of program staff responsible for the direct delivery of services possesses specialized qualifications that are directly related to the recreational services being offered; (D) That at least seventy-five percent (75%) of any individual child's program time is spent engaging in the recreational activities that are reasonably age appropriate for the type of activity and the ages served; (E) That the supervision or care of children, or other types of child care-related services, is incidental to its overall purpose; and (F) That no individual child could participate in the program or activity: (i) For more than seven (7) hours per day; or (ii) If a child participates for more than seven (7) hours per day, that such child could not continue to participate for more than seven (7) consecutive weeks and for no more than one hundred twenty (120) days per calendar year; (8) Camp programs. To qualify for a camp program exemption, a child care agency must meet the following criteria: (A) That the primary purpose of the program or activity is to provide intensive recreational, religious, outdoor or other activities that are not routinely available in full-time child care; (B) That the program or activity operates exclusively during the summer months and less than ninety (90) days in any calendar year; and (C) That the enrollment periods for participation in the program or activity clearly define the duration of the program or activity and exclude drop-in child care; (9) (A) "Casual care" operations consisting of places or facilities operated by any person or entity that provides child care, at the same time, for a minimum of five (5) children, but less than fifteen (15) children, who are not related to the primary caregiver, during short periods of time that do not exceed ten (10) hours per week or six (6) hours per day for any individual child while the parents or other custodians of the children are engaged in short-term activities, not including employment of the parent or other custodian of the child; (B) These operations shall register with the department their intent to conduct casual care of children, and, as evidence of their exempt status, these operations shall maintain records that include, at a minimum, the children's names, ages, addresses, dates and times of attendance, the parents' or custodians' names, addresses, and intended whereabouts while the children are in care, and the telephone numbers of persons to contact in the event of an emergency. All records shall be made available at any time to any authorized representative of the department; (C) Failure to comply with the requirements of this subdivision (a)(9) shall subject the violator to a civil penalty by the department not to exceed five hundred dollars ($500) for the first violation and not to exceed one thousand dollars ($1,000) for subsequent violations, and the department may seek injunctive relief in the chancery or circuit court of the county where the place or facility is located to prevent further operation of the place or facility or to obtain entry to conduct any inspection of the operation; (10) (A) Any program or facility operated by, or in affiliation with, any Boys and Girls Club that provides care for school-aged children and that holds membership in good standing with Boys and Girls Clubs of America and that is certified as being in compliance with the purposes, procedures, voluntary standards and mandatory requirements of Boys and Girls Clubs of America; (B) Any such Boys and Girls Club that applies to participate in state or federally funded programs that require child care licensing by the state as a term of eligibility may elect to apply to the department for child care licensing and regulation. Upon meeting departmental standards, the Boys and Girls Club may be licensed as a child care center/provider; (C) The department is hereby authorized to grant a waiver from any rule concerning grouping of children and adult/child ratios for child care centers to any Boys and Girls Club that falls within both subdivisions (a)(11)(A) and (a)(10)(A) and (B), and that is providing after-school child care to mixed groups of school-aged children; and (11) Nurseries, babysitting services and other children's activities that are not ordinarily operated on a daily basis, but are associated with religious services or related activities of churches or other houses of worship. Such services or activities may include limited special events that shall not exceed fourteen (14) days in any calendar year.
(1) Entities or persons licensed or otherwise regulated by other agencies of the state or federal government providing health, psychiatric or psychological care or treatment or mental health care or counseling for children while the entity or person is engaged in such licensed or regulated activity;
(2) Preschool or school age child care programs, a Title I program, a school-administered head start or an even start program, and all state-approved Montessori school programs, that are subject to regulation by the department of education or other departments of state government;
(3) Private or parochial kindergartens for five-year-old children if such kindergartens operate on the public school kindergarten schedule;
(4) Child care centers operated by church-related schools, as defined by § 49-50-801 , which shall be subject to regulation by the department of education pursuant to title 49, chapter 1, part 11;
(5) Educational programs. To qualify for an educational program exemption, a child care agency must meet the following criteria: (A) That the sole or primary purpose of the program is: (i) To prepare children for advancement to the next educational level through a prescribed course of study or curriculum that is not typically available in a department-regulated child care setting; (ii) To provide specialized tutoring services to assist children with the passage of mandatory educational proficiency examinations; or (iii) To provide education-only services to special needs children; and (B) That the program time scheduled to be dedicated to the educational activity is reasonably age appropriate for the type of activity and the ages served;
(A) That the sole or primary purpose of the program is: (i) To prepare children for advancement to the next educational level through a prescribed course of study or curriculum that is not typically available in a department-regulated child care setting; (ii) To provide specialized tutoring services to assist children with the passage of mandatory educational proficiency examinations; or (iii) To provide education-only services to special needs children; and
(i) To prepare children for advancement to the next educational level through a prescribed course of study or curriculum that is not typically available in a department-regulated child care setting;
(ii) To provide specialized tutoring services to assist children with the passage of mandatory educational proficiency examinations; or
(iii) To provide education-only services to special needs children; and
(B) That the program time scheduled to be dedicated to the educational activity is reasonably age appropriate for the type of activity and the ages served;
(6) (A) "Parents' Day Out" or similar programs operated by a religious institution or religious organization that provide custodial care and services for children of less than school age, with no child attending more than twelve (12) hours in each calendar week; (B) Existing and all future programs shall register with the department their intent to operate a Parents' Day Out program prior to offering the service, and, as evidence of their exempt status, these programs shall maintain records that include, at a minimum, dates and times of each child's attendance; (C) The records and forms shall be made available during regular business hours to the commissioner or commissioner's designee; (D) Each separate location or campus of a religious institution or religious organization shall be considered a separate religious institution or religious organization for the purpose of Parents' Day Out or any similar program;
(A) "Parents' Day Out" or similar programs operated by a religious institution or religious organization that provide custodial care and services for children of less than school age, with no child attending more than twelve (12) hours in each calendar week;
(B) Existing and all future programs shall register with the department their intent to operate a Parents' Day Out program prior to offering the service, and, as evidence of their exempt status, these programs shall maintain records that include, at a minimum, dates and times of each child's attendance;
(C) The records and forms shall be made available during regular business hours to the commissioner or commissioner's designee;
(D) Each separate location or campus of a religious institution or religious organization shall be considered a separate religious institution or religious organization for the purpose of Parents' Day Out or any similar program;
(7) Recreational programs. To qualify for a recreational program exemption, a child care agency must meet the following criteria: (A) That the sole or primary purpose of the program or activity is to provide recreational services, e.g., organized sports or crafts activities; (B) That the sole or primary purpose of the program or activity is dedicated to recreational activities for a substantial portion of the hours of operation; (C) That the majority of program staff responsible for the direct delivery of services possesses specialized qualifications that are directly related to the recreational services being offered; (D) That at least seventy-five percent (75%) of any individual child's program time is spent engaging in the recreational activities that are reasonably age appropriate for the type of activity and the ages served; (E) That the supervision or care of children, or other types of child care-related services, is incidental to its overall purpose; and (F) That no individual child could participate in the program or activity: (i) For more than seven (7) hours per day; or (ii) If a child participates for more than seven (7) hours per day, that such child could not continue to participate for more than seven (7) consecutive weeks and for no more than one hundred twenty (120) days per calendar year;
(A) That the sole or primary purpose of the program or activity is to provide recreational services, e.g., organized sports or crafts activities;
(B) That the sole or primary purpose of the program or activity is dedicated to recreational activities for a substantial portion of the hours of operation;
(C) That the majority of program staff responsible for the direct delivery of services possesses specialized qualifications that are directly related to the recreational services being offered;
(D) That at least seventy-five percent (75%) of any individual child's program time is spent engaging in the recreational activities that are reasonably age appropriate for the type of activity and the ages served;
(E) That the supervision or care of children, or other types of child care-related services, is incidental to its overall purpose; and
(F) That no individual child could participate in the program or activity: (i) For more than seven (7) hours per day; or (ii) If a child participates for more than seven (7) hours per day, that such child could not continue to participate for more than seven (7) consecutive weeks and for no more than one hundred twenty (120) days per calendar year;
(i) For more than seven (7) hours per day; or
(ii) If a child participates for more than seven (7) hours per day, that such child could not continue to participate for more than seven (7) consecutive weeks and for no more than one hundred twenty (120) days per calendar year;
(8) Camp programs. To qualify for a camp program exemption, a child care agency must meet the following criteria: (A) That the primary purpose of the program or activity is to provide intensive recreational, religious, outdoor or other activities that are not routinely available in full-time child care; (B) That the program or activity operates exclusively during the summer months and less than ninety (90) days in any calendar year; and (C) That the enrollment periods for participation in the program or activity clearly define the duration of the program or activity and exclude drop-in child care;
(A) That the primary purpose of the program or activity is to provide intensive recreational, religious, outdoor or other activities that are not routinely available in full-time child care;
(B) That the program or activity operates exclusively during the summer months and less than ninety (90) days in any calendar year; and
(C) That the enrollment periods for participation in the program or activity clearly define the duration of the program or activity and exclude drop-in child care;
(9) (A) "Casual care" operations consisting of places or facilities operated by any person or entity that provides child care, at the same time, for a minimum of five (5) children, but less than fifteen (15) children, who are not related to the primary caregiver, during short periods of time that do not exceed ten (10) hours per week or six (6) hours per day for any individual child while the parents or other custodians of the children are engaged in short-term activities, not including employment of the parent or other custodian of the child; (B) These operations shall register with the department their intent to conduct casual care of children, and, as evidence of their exempt status, these operations shall maintain records that include, at a minimum, the children's names, ages, addresses, dates and times of attendance, the parents' or custodians' names, addresses, and intended whereabouts while the children are in care, and the telephone numbers of persons to contact in the event of an emergency. All records shall be made available at any time to any authorized representative of the department; (C) Failure to comply with the requirements of this subdivision (a)(9) shall subject the violator to a civil penalty by the department not to exceed five hundred dollars ($500) for the first violation and not to exceed one thousand dollars ($1,000) for subsequent violations, and the department may seek injunctive relief in the chancery or circuit court of the county where the place or facility is located to prevent further operation of the place or facility or to obtain entry to conduct any inspection of the operation;
(A) "Casual care" operations consisting of places or facilities operated by any person or entity that provides child care, at the same time, for a minimum of five (5) children, but less than fifteen (15) children, who are not related to the primary caregiver, during short periods of time that do not exceed ten (10) hours per week or six (6) hours per day for any individual child while the parents or other custodians of the children are engaged in short-term activities, not including employment of the parent or other custodian of the child;
(B) These operations shall register with the department their intent to conduct casual care of children, and, as evidence of their exempt status, these operations shall maintain records that include, at a minimum, the children's names, ages, addresses, dates and times of attendance, the parents' or custodians' names, addresses, and intended whereabouts while the children are in care, and the telephone numbers of persons to contact in the event of an emergency. All records shall be made available at any time to any authorized representative of the department;
(C) Failure to comply with the requirements of this subdivision (a)(9) shall subject the violator to a civil penalty by the department not to exceed five hundred dollars ($500) for the first violation and not to exceed one thousand dollars ($1,000) for subsequent violations, and the department may seek injunctive relief in the chancery or circuit court of the county where the place or facility is located to prevent further operation of the place or facility or to obtain entry to conduct any inspection of the operation;
(10) (A) Any program or facility operated by, or in affiliation with, any Boys and Girls Club that provides care for school-aged children and that holds membership in good standing with Boys and Girls Clubs of America and that is certified as being in compliance with the purposes, procedures, voluntary standards and mandatory requirements of Boys and Girls Clubs of America; (B) Any such Boys and Girls Club that applies to participate in state or federally funded programs that require child care licensing by the state as a term of eligibility may elect to apply to the department for child care licensing and regulation. Upon meeting departmental standards, the Boys and Girls Club may be licensed as a child care center/provider; (C) The department is hereby authorized to grant a waiver from any rule concerning grouping of children and adult/child ratios for child care centers to any Boys and Girls Club that falls within both subdivisions (a)(11)(A) and (a)(10)(A) and (B), and that is providing after-school child care to mixed groups of school-aged children; and
(A) Any program or facility operated by, or in affiliation with, any Boys and Girls Club that provides care for school-aged children and that holds membership in good standing with Boys and Girls Clubs of America and that is certified as being in compliance with the purposes, procedures, voluntary standards and mandatory requirements of Boys and Girls Clubs of America;
(B) Any such Boys and Girls Club that applies to participate in state or federally funded programs that require child care licensing by the state as a term of eligibility may elect to apply to the department for child care licensing and regulation. Upon meeting departmental standards, the Boys and Girls Club may be licensed as a child care center/provider;
(C) The department is hereby authorized to grant a waiver from any rule concerning grouping of children and adult/child ratios for child care centers to any Boys and Girls Club that falls within both subdivisions (a)(11)(A) and (a)(10)(A) and (B), and that is providing after-school child care to mixed groups of school-aged children; and
(11) Nurseries, babysitting services and other children's activities that are not ordinarily operated on a daily basis, but are associated with religious services or related activities of churches or other houses of worship. Such services or activities may include limited special events that shall not exceed fourteen (14) days in any calendar year.
(b) (1) Exempt programs under subdivisions (a)(3), (6) and (9) shall post a sign stating, "This facility is not required to be licensed by the state as a child care agency." (2) When a parent, custodian or guardian initially registers a child with an exempt program under subdivisions (a)(3), (6) and (9), which is required to post a sign pursuant to this subsection (b), the parent, custodian or guardian shall sign a form indicating that the parent, custodian or guardian has been advised and understands that the program is not licensed and is not required to be licensed by the state as a child care agency. The same language that is required to be placed on the sign shall be printed on such form at least in 16-point type with a signature line for the parent, custodian or guardian immediately following such language. The signed form shall be maintained with the records of the exempt entity.
(1) Exempt programs under subdivisions (a)(3), (6) and (9) shall post a sign stating, "This facility is not required to be licensed by the state as a child care agency."
(2) When a parent, custodian or guardian initially registers a child with an exempt program under subdivisions (a)(3), (6) and (9), which is required to post a sign pursuant to this subsection (b), the parent, custodian or guardian shall sign a form indicating that the parent, custodian or guardian has been advised and understands that the program is not licensed and is not required to be licensed by the state as a child care agency. The same language that is required to be placed on the sign shall be printed on such form at least in 16-point type with a signature line for the parent, custodian or guardian immediately following such language. The signed form shall be maintained with the records of the exempt entity.
(c) In analyzing whether the program or activity is exempt pursuant to this section, unless the department determines upon clear and convincing evidence that the program or activity qualifies for an exemption based upon the criteria set forth in subdivisions (a)(1)-(11), the department shall consider the following nonexclusive criteria to determine if the program or activity is clearly distinguishable from child care services typically regulated by the department and otherwise qualifies for exemption from licensing: (1) The sole or primary purpose of the program or activity is to provide specialized opportunities for the child's educational, social, cultural, religious or athletic development, or to provide the child with mental or physical health services; (2) The time period in which the program or activity provides these opportunities is consistent with a reasonable time period for the completion of the program or activity, considering the age of each child served and the nature of the program; (3) The primary purpose of the program or activity is not routinely available or could not be made routinely available in the typical child care settings regulated by the department; (4) Parents could reasonably be expected to choose the program or activity because of the unique nature of what it offers, rather than as a substitute for full-time, before or after school, holiday or weather-related child care; and (5) If the program or activity is regulated by any other federal, state or local agency, it is required by such other agency to comply with standards that substantially meet or exceed department licensing regulations.
(1) The sole or primary purpose of the program or activity is to provide specialized opportunities for the child's educational, social, cultural, religious or athletic development, or to provide the child with mental or physical health services;
(2) The time period in which the program or activity provides these opportunities is consistent with a reasonable time period for the completion of the program or activity, considering the age of each child served and the nature of the program;
(3) The primary purpose of the program or activity is not routinely available or could not be made routinely available in the typical child care settings regulated by the department;
(4) Parents could reasonably be expected to choose the program or activity because of the unique nature of what it offers, rather than as a substitute for full-time, before or after school, holiday or weather-related child care; and
(5) If the program or activity is regulated by any other federal, state or local agency, it is required by such other agency to comply with standards that substantially meet or exceed department licensing regulations.
(d) (1) The department shall not be required to grant exemptions to programs or activities that offer otherwise exempt opportunities or services as a mere component of a program or activity that the department determines primarily constitutes substitute child care. (2) No program or activity shall be exempt from licensing solely for the reason that the care and supervision of children that constitutes child care is offered only on a part-time or periodic basis. (3) Exemption from licensure does not exempt the program or activity from compliance with any other local, state or federal requirements.
(1) The department shall not be required to grant exemptions to programs or activities that offer otherwise exempt opportunities or services as a mere component of a program or activity that the department determines primarily constitutes substitute child care.
(2) No program or activity shall be exempt from licensing solely for the reason that the care and supervision of children that constitutes child care is offered only on a part-time or periodic basis.
(3) Exemption from licensure does not exempt the program or activity from compliance with any other local, state or federal requirements.
(e) A child care agency claiming an exemption pursuant to this section may submit to the department's licensing director, or designee, a sworn, written request for exemption in such manner and form as the department may require. The request shall provide a detailed description of the operation of the program or activity, the program's or activity's purpose and the applicant's basis for claiming an exemption. The department shall provide a written response to the exemption request stating the reasons the exemption was granted or denied.
Amended by 2021 Tenn. Acts, ch. 162, s 1, eff. 7/1/2021.
Amended by 2013 Tenn. Acts, ch. 72, Secs.s 1, s 2 eff. 4/1/2013.
Acts 2000, ch. 981, § 4; 2001, ch. 453, § 7; 2005, ch. 151, §§ 8 - 12.
Tenn. Code Ann. § 71-5-137 — TN Code / Title 71 / Chapter 5 / Section 71-5-137
Disclosures required of persons associated with managed care organizations
Status: in_force

(a) The following persons associated with a managed care organization that participates in the TennCare program shall make disclosures required in § 8-50-502 : (1) Officers and directors of the managed care organization; (2) Any person who is the legal or beneficial owner of five percent (5%) or more of the stock or other ownership interest in the managed care organization; and (3) Any person who controls, is controlled by or is under common control with, the managed care organization and who has entered into a management agreement, service contract, cost-sharing agreement or reinsurance contract with a managed care organization. For purposes of this subdivision (a)(3), "control" has the same meaning as set forth in § 56-11-101(b) . (b) An official in the legislative branch, or an official in the executive branch and their immediate families, as such terms are defined in § 3-6-301 , shall disclose any ownership interest or other connection as an officer, employee or director that such person may have in any managed care organization that participates in the TennCare program. (c) The compensation from the managed care organization of all persons required to make disclosure under subsection (a) shall be disclosed in addition to the disclosure required under subsection (a). (d) Disclosures required by this section shall be made to the bureau of TennCare and shall be made by March 1 of each year for the previous calendar year. Amended by 2013 Tenn. Acts, ch. 89,s 4, eff. 7/1/2013. Acts 1999, ch. 379, § 1.
(a) The following persons associated with a managed care organization that participates in the TennCare program shall make disclosures required in § 8-50-502 : (1) Officers and directors of the managed care organization; (2) Any person who is the legal or beneficial owner of five percent (5%) or more of the stock or other ownership interest in the managed care organization; and (3) Any person who controls, is controlled by or is under common control with, the managed care organization and who has entered into a management agreement, service contract, cost-sharing agreement or reinsurance contract with a managed care organization. For purposes of this subdivision (a)(3), "control" has the same meaning as set forth in § 56-11-101(b) .
(1) Officers and directors of the managed care organization;
(2) Any person who is the legal or beneficial owner of five percent (5%) or more of the stock or other ownership interest in the managed care organization; and
(3) Any person who controls, is controlled by or is under common control with, the managed care organization and who has entered into a management agreement, service contract, cost-sharing agreement or reinsurance contract with a managed care organization. For purposes of this subdivision (a)(3), "control" has the same meaning as set forth in § 56-11-101(b) .
(b) An official in the legislative branch, or an official in the executive branch and their immediate families, as such terms are defined in § 3-6-301 , shall disclose any ownership interest or other connection as an officer, employee or director that such person may have in any managed care organization that participates in the TennCare program.
(c) The compensation from the managed care organization of all persons required to make disclosure under subsection (a) shall be disclosed in addition to the disclosure required under subsection (a).
(d) Disclosures required by this section shall be made to the bureau of TennCare and shall be made by March 1 of each year for the previous calendar year.
Amended by 2013 Tenn. Acts, ch. 89,s 4, eff. 7/1/2013.
Acts 1999, ch. 379, § 1.
Tenn. Code Ann. § 71-2-108 — TN Code / Title 71 / Chapter 2 / Section 71-2-108
[Repealed]
Status: repealed

Repealed by 2024 Tenn. Acts, ch. 688,s 98, eff. 7/1/2024. Acts 1981, ch. 428, § 10; 1982, ch. 834, § 11; 1984, ch. 943, § 6; T.C.A., §§ 14-6-109, 71-2-109 ; Acts 2001, ch. 397, § 9.
Repealed by 2024 Tenn. Acts, ch. 688,s 98, eff. 7/1/2024.
Acts 1981, ch. 428, § 10; 1982, ch. 834, § 11; 1984, ch. 943, § 6; T.C.A., §§ 14-6-109, 71-2-109 ; Acts 2001, ch. 397, § 9.
Tenn. Code Ann. § 71-5-1406 — TN Code / Title 71 / Chapter 5 / Section 71-5-1406
Implementation of policies and processes by commissioner
Status: in_force

The commissioner shall implement policies and processes that expedite the determination of medicaid categorical and financial eligibility and medical eligibility for home and community-based programs and services, either through contracted functions of the department of human services or within the bureau of TennCare. The policies and processes may include, but are not limited to, presumptive or immediate medicaid eligibility determination, fast-track eligibility determination, development of specialized units or teams for determination of medicaid eligibility for HCBS, implementation of facilitated enrollment processes and the implementation of an online medical eligibility application process. Acts 2008, ch. 1190, § 7.
The commissioner shall implement policies and processes that expedite the determination of medicaid categorical and financial eligibility and medical eligibility for home and community-based programs and services, either through contracted functions of the department of human services or within the bureau of TennCare. The policies and processes may include, but are not limited to, presumptive or immediate medicaid eligibility determination, fast-track eligibility determination, development of specialized units or teams for determination of medicaid eligibility for HCBS, implementation of facilitated enrollment processes and the implementation of an online medical eligibility application process.
Acts 2008, ch. 1190, § 7.
Tenn. Code Ann. § 71-5-304 — TN Code / Title 71 / Chapter 5 / Section 71-5-304
Duties of department
Status: in_force

The department shall: (1) Supervise the administration of the food stamp or food assistance program in this state for eligible recipients; (2) Make uniform rules and regulations, not inconsistent with law, for carrying out and enforcing this part in an efficient, economical and impartial manner, to the end that the food stamp or food assistance program may be administered uniformly in all counties of this state that have been designated by the United States secretary of agriculture to participate in the food stamp or food assistance program and in which counties a food stamp or food assistance program is currently in operation; (3) Establish state-wide standards for determining the amount of food stamp assistance or food assistance any person, household or family shall receive under this part; (4) Cooperate with the secretary of the United States department of agriculture, or any federal officer or agency made successor to the department of agriculture, in any reasonable manner as may be necessary to qualify for federal aid for food stamp assistance or food assistance in conformity with this part, including the making of such reports in such form and containing such information as the secretary of agriculture, or any federal officer or agency made successor to the department of agriculture, may from time to time require, and comply with such provisions as such secretary may from time to time find necessary to assure the correctness and verification of such reports; (5) Establish and enforce safeguards to prevent unauthorized disclosures or improper use of information contained in applications, reports of investigations, and correspondence in the individual case records of recipients of food coupons, food stamps or food assistance transferred electronically or by other means; and (6) Adopt rules and regulations for the implementation of a sliding scale of benefit reduction for individuals receiving food coupons, food stamps or food assistance transferred electronically or by other means for six (6) months or longer in which benefits do not abruptly terminate when a recipient earns above a certain maximum amount, but instead, such benefits gradually lessen in increments of twenty-five percent (25%) of the individual's total benefit every three (3) months; provided, that no rules and regulations shall conflict with federal legislation or provide benefits exceeding federal maximum income guidelines, and no such rules and regulations shall be promulgated that shall cause a decrease or suspension of federal funding. This subdivision (6) shall take effect only to the extent that such provisions are consistent with federal laws and regulations governing the temporary assistance for needy families (TANF) and food stamp or food assistance programs and only to the extent federal financial participation under such programs is available therefor. Amended by 2017 Tenn. Acts, ch. 461,s 4, eff. 5/25/2017. Acts 1971, ch. 136, § 4; T.C.A., § 14-2204; Acts 1985, ch. 313, §§ 2, 3; T.C.A., § 14-27-104; Acts 1996, ch. 950, § 15; 1999, ch. 248, §§ 2 - 4; 1999, ch. 520, § 47.
The department shall:
(1) Supervise the administration of the food stamp or food assistance program in this state for eligible recipients;
(2) Make uniform rules and regulations, not inconsistent with law, for carrying out and enforcing this part in an efficient, economical and impartial manner, to the end that the food stamp or food assistance program may be administered uniformly in all counties of this state that have been designated by the United States secretary of agriculture to participate in the food stamp or food assistance program and in which counties a food stamp or food assistance program is currently in operation;
(3) Establish state-wide standards for determining the amount of food stamp assistance or food assistance any person, household or family shall receive under this part;
(4) Cooperate with the secretary of the United States department of agriculture, or any federal officer or agency made successor to the department of agriculture, in any reasonable manner as may be necessary to qualify for federal aid for food stamp assistance or food assistance in conformity with this part, including the making of such reports in such form and containing such information as the secretary of agriculture, or any federal officer or agency made successor to the department of agriculture, may from time to time require, and comply with such provisions as such secretary may from time to time find necessary to assure the correctness and verification of such reports;
(5) Establish and enforce safeguards to prevent unauthorized disclosures or improper use of information contained in applications, reports of investigations, and correspondence in the individual case records of recipients of food coupons, food stamps or food assistance transferred electronically or by other means; and
(6) Adopt rules and regulations for the implementation of a sliding scale of benefit reduction for individuals receiving food coupons, food stamps or food assistance transferred electronically or by other means for six (6) months or longer in which benefits do not abruptly terminate when a recipient earns above a certain maximum amount, but instead, such benefits gradually lessen in increments of twenty-five percent (25%) of the individual's total benefit every three (3) months; provided, that no rules and regulations shall conflict with federal legislation or provide benefits exceeding federal maximum income guidelines, and no such rules and regulations shall be promulgated that shall cause a decrease or suspension of federal funding. This subdivision (6) shall take effect only to the extent that such provisions are consistent with federal laws and regulations governing the temporary assistance for needy families (TANF) and food stamp or food assistance programs and only to the extent federal financial participation under such programs is available therefor.
Amended by 2017 Tenn. Acts, ch. 461,s 4, eff. 5/25/2017.
Acts 1971, ch. 136, § 4; T.C.A., § 14-2204; Acts 1985, ch. 313, §§ 2, 3; T.C.A., § 14-27-104; Acts 1996, ch. 950, § 15; 1999, ch. 248, §§ 2 - 4; 1999, ch. 520, § 47.
Tenn. Code Ann. § 71-5-2601 — TN Code / Title 71 / Chapter 5 / Section 71-5-2601
Offenses - Penalties - Remedies - Limitations
Status: in_force

(a) (1) (A) A person, including an enrollee, recipient, or applicant, commits an offense who knowingly obtains, or attempts to obtain, or aids or abets any person to obtain, by means of a willfully false statement, representation, or impersonation, or by concealment of any material fact, or by any other fraudulent means, or in any manner not authorized by any rule, regulation, or statute governing TennCare: (i) Medical assistance benefits or any assistance provided pursuant to any rule, regulation, procedure, or statute governing TennCare to which such person is not entitled, or of a greater value than that to which such person is authorized; (ii) Benefits by knowingly making a willfully false statement, or concealing a material fact relating to personal or household income, thereby resulting in the assessment of a lower monthly premium than the person would be required to pay if not for the false statement or concealment of a material fact; or (iii) Controlled substance benefits by knowingly, willfully and with the intent to deceive, failing to disclose to a physician, nurse practitioner, ancillary staff, or other health care provider from whom the person obtains a controlled substance, or a prescription for a controlled substance, that the person has received either the same controlled substance or a prescription for the same controlled substance, or a controlled substance of similar therapeutic use or a prescription for a controlled substance of similar therapeutic use, from another practitioner within the previous thirty (30) days and the person used TennCare to obtain the benefits. (B) An offense under subdivision (a)(1)(A) is a Class D felony. In addition to restitution, a person who pleads guilty or nolo contendere or is found guilty of violating this section shall be fined: (i) Two hundred fifty dollars ($250) for the first offense; (ii) Five hundred dollars ($500) for the second offense; and (iii) One thousand dollars ($1,000) for a third or subsequent offense. (C) The fines authorized under subdivision (a)(1)(B) shall be collected by the county court clerk with five percent (5%) of the fine going to the clerk of the court and the remaining ninety-five percent (95%) of the fine transmitted to the state treasurer on a monthly basis for deposit in the general fund. (2) (A) A person, firm, corporation, partnership or any other entity, including a vendor, other than an enrollee, recipient, or applicant, commits an offense who knowingly obtains, or attempts to obtain, or aids or abets any person or entity to obtain, by means of a willfully false statement, report, representation, claim or impersonation, or by concealment of any material fact, or by any other fraudulent means, including knowingly presenting or causing to be presented to TennCare or any of its contractors, subcontractors or vendors a false or fraudulent claim for payment or approval, or in any manner not authorized by any rule, regulation, procedure, or statute governing TennCare, medical assistance payments provided pursuant to any rule, regulation, procedure, or statute governing TennCare to which the person or entity is not entitled, or of a greater value than that to which the person or entity is authorized. For purposes of this subsection (a), "attempts to obtain" includes making or presenting to any person a claim for any payment under any rule, regulation, procedure, or statute governing TennCare, knowing the claim to be false, fictitious or fraudulent. (B) An offense under subdivision (a)(2)(A) is a Class D felony unless the value of the property or services obtained meets the threshold set for a Class B or Class C offense under § 39-14-105 , in which case the appropriate higher class shall apply. In addition to any other penalty, a sentence that includes a fine, when imposed upon an entity or upon a person for actions benefiting an entity, shall include the corporation fine specified in § 40-35-111 . (3) (A) A person, firm, corporation, partnership or any other entity commits an offense when providing a willfully false statement regarding another's medical condition or eligibility for insurance, to aid or abet another in obtaining or attempting to obtain medical assistance payments, medical assistance benefits or any assistance provided under any rule, regulation, procedure, or statute governing TennCare to which the person is not entitled or to a greater value than that to which such person is authorized. For purposes of this subsection (a), "attempting to obtain" includes making or presenting to any person a claim for any payment under any rule, regulation, procedure, or statute governing TennCare, knowing such claim to be false, fictitious or fraudulent. (B) An offense under subdivision (a)(3)(A) is a Class D felony unless the value of the property or services obtained meets the threshold set for a Class B or Class C offense under § 39-14-105 , in which case the appropriate higher class shall apply. In addition to any other penalty, a sentence that includes a fine, when imposed upon an entity or upon a person for actions benefiting an entity, shall include the corporation fine specified in § 40-35-111 . (4) Any person, firm, corporation, partnership or other entity is guilty of a Class D felony that, in connection with the investigation of a violation of offenses set forth in this section, knowingly and willfully: (A) Falsifies, conceals or omits by any trick, scheme, artifice, or device a material fact; (B) Makes any materially false, fictitious or fraudulent statement or representation; or (C) Makes or uses any materially false writing or document. (5) (A) A person commits an offense who knowingly sells, delivers, or aids and abets any person in the sale or delivery of a drug and used TennCare to obtain the drug. (B) As used in this subdivision (a)(5), "drug", "deliver" and "delivery" shall have the same meaning as set forth in § 39-17-402 . (C) This subdivision (a)(5) shall not apply to any duly licensed physician, nurse practitioner, pharmacist, or other provider authorized to issue or dispense a prescription acting in good faith in the course of that person's profession. (D) An offense under this subdivision (a)(5) is a Class D felony. (b) In addition to any other penalties provided for any person, firm, corporation, partnership or other entity under subsection (a), the court shall also: (1) (A) Order restitution to TennCare in the greater of the total amount of all medical assistance payments made to all providers, or the total amount of all payments to a managed care entity, related to the services underlying the offense; and (B) Report the person or entity to the appropriate professional licensure board or the department of commerce and insurance for disciplinary action. (2) In addition to any other penalties provided under this section, the court may also, to the full extent permitted by federal law and the TennCare waiver as interpreted by the CMS, order any such person or entity disqualified from participation in the medical assistance program; such disqualification may also apply to any person who is convicted of a criminal offense involving the selling of prescription drugs obtained through the TennCare program. Any person or entity disqualified from participation in the medical assistance program shall make restitution in the total amount of the medical assistance or underpayment which forms the basis for the conviction before such person or entity can reenroll in the TennCare program. (3) A subsequent denial of eligibility or denial of a claim for payment does not, of itself, establish proof of falsity of a statement, representation, report or claim for payment under subsection (a). (c) Nothing in this section shall be construed as prohibiting a person or entity violating this section from being prosecuted for theft of property or services under title 39, chapter 14. (d) In addition to any other remedy available, including those provided in this section, the state may recover from any person or such person's estate, or from a firm, corporation, partnership or other entity, including a vendor, the amount of medical assistance benefits or payments improperly paid as a result of fraudulent means or actions not authorized by any rule, regulation, procedure, or statute governing TennCare. (e) Notwithstanding any other law to the contrary, prosecutions for violations of this section shall be commenced within four (4) years after the commission of the offense. Amended by 2016 Tenn. Acts, ch. 744,s 2, eff. 7/1/2016. Amended by 2016 Tenn. Acts, ch. 744,s 1, eff. 7/1/2016. Amended by 2013 Tenn. Acts, ch. 159,Secs.s1, s2 eff. 4/16/2013. Acts 2004, ch. 784, § 1; 2007, ch. 103, § 1; 2007, ch. 458, §§ 1, 2; 2008, ch. 1139, § 1.
(a) (1) (A) A person, including an enrollee, recipient, or applicant, commits an offense who knowingly obtains, or attempts to obtain, or aids or abets any person to obtain, by means of a willfully false statement, representation, or impersonation, or by concealment of any material fact, or by any other fraudulent means, or in any manner not authorized by any rule, regulation, or statute governing TennCare: (i) Medical assistance benefits or any assistance provided pursuant to any rule, regulation, procedure, or statute governing TennCare to which such person is not entitled, or of a greater value than that to which such person is authorized; (ii) Benefits by knowingly making a willfully false statement, or concealing a material fact relating to personal or household income, thereby resulting in the assessment of a lower monthly premium than the person would be required to pay if not for the false statement or concealment of a material fact; or (iii) Controlled substance benefits by knowingly, willfully and with the intent to deceive, failing to disclose to a physician, nurse practitioner, ancillary staff, or other health care provider from whom the person obtains a controlled substance, or a prescription for a controlled substance, that the person has received either the same controlled substance or a prescription for the same controlled substance, or a controlled substance of similar therapeutic use or a prescription for a controlled substance of similar therapeutic use, from another practitioner within the previous thirty (30) days and the person used TennCare to obtain the benefits. (B) An offense under subdivision (a)(1)(A) is a Class D felony. In addition to restitution, a person who pleads guilty or nolo contendere or is found guilty of violating this section shall be fined: (i) Two hundred fifty dollars ($250) for the first offense; (ii) Five hundred dollars ($500) for the second offense; and (iii) One thousand dollars ($1,000) for a third or subsequent offense. (C) The fines authorized under subdivision (a)(1)(B) shall be collected by the county court clerk with five percent (5%) of the fine going to the clerk of the court and the remaining ninety-five percent (95%) of the fine transmitted to the state treasurer on a monthly basis for deposit in the general fund. (2) (A) A person, firm, corporation, partnership or any other entity, including a vendor, other than an enrollee, recipient, or applicant, commits an offense who knowingly obtains, or attempts to obtain, or aids or abets any person or entity to obtain, by means of a willfully false statement, report, representation, claim or impersonation, or by concealment of any material fact, or by any other fraudulent means, including knowingly presenting or causing to be presented to TennCare or any of its contractors, subcontractors or vendors a false or fraudulent claim for payment or approval, or in any manner not authorized by any rule, regulation, procedure, or statute governing TennCare, medical assistance payments provided pursuant to any rule, regulation, procedure, or statute governing TennCare to which the person or entity is not entitled, or of a greater value than that to which the person or entity is authorized. For purposes of this subsection (a), "attempts to obtain" includes making or presenting to any person a claim for any payment under any rule, regulation, procedure, or statute governing TennCare, knowing the claim to be false, fictitious or fraudulent. (B) An offense under subdivision (a)(2)(A) is a Class D felony unless the value of the property or services obtained meets the threshold set for a Class B or Class C offense under § 39-14-105 , in which case the appropriate higher class shall apply. In addition to any other penalty, a sentence that includes a fine, when imposed upon an entity or upon a person for actions benefiting an entity, shall include the corporation fine specified in § 40-35-111 . (3) (A) A person, firm, corporation, partnership or any other entity commits an offense when providing a willfully false statement regarding another's medical condition or eligibility for insurance, to aid or abet another in obtaining or attempting to obtain medical assistance payments, medical assistance benefits or any assistance provided under any rule, regulation, procedure, or statute governing TennCare to which the person is not entitled or to a greater value than that to which such person is authorized. For purposes of this subsection (a), "attempting to obtain" includes making or presenting to any person a claim for any payment under any rule, regulation, procedure, or statute governing TennCare, knowing such claim to be false, fictitious or fraudulent. (B) An offense under subdivision (a)(3)(A) is a Class D felony unless the value of the property or services obtained meets the threshold set for a Class B or Class C offense under § 39-14-105 , in which case the appropriate higher class shall apply. In addition to any other penalty, a sentence that includes a fine, when imposed upon an entity or upon a person for actions benefiting an entity, shall include the corporation fine specified in § 40-35-111 . (4) Any person, firm, corporation, partnership or other entity is guilty of a Class D felony that, in connection with the investigation of a violation of offenses set forth in this section, knowingly and willfully: (A) Falsifies, conceals or omits by any trick, scheme, artifice, or device a material fact; (B) Makes any materially false, fictitious or fraudulent statement or representation; or (C) Makes or uses any materially false writing or document. (5) (A) A person commits an offense who knowingly sells, delivers, or aids and abets any person in the sale or delivery of a drug and used TennCare to obtain the drug. (B) As used in this subdivision (a)(5), "drug", "deliver" and "delivery" shall have the same meaning as set forth in § 39-17-402 . (C) This subdivision (a)(5) shall not apply to any duly licensed physician, nurse practitioner, pharmacist, or other provider authorized to issue or dispense a prescription acting in good faith in the course of that person's profession. (D) An offense under this subdivision (a)(5) is a Class D felony.
(1) (A) A person, including an enrollee, recipient, or applicant, commits an offense who knowingly obtains, or attempts to obtain, or aids or abets any person to obtain, by means of a willfully false statement, representation, or impersonation, or by concealment of any material fact, or by any other fraudulent means, or in any manner not authorized by any rule, regulation, or statute governing TennCare: (i) Medical assistance benefits or any assistance provided pursuant to any rule, regulation, procedure, or statute governing TennCare to which such person is not entitled, or of a greater value than that to which such person is authorized; (ii) Benefits by knowingly making a willfully false statement, or concealing a material fact relating to personal or household income, thereby resulting in the assessment of a lower monthly premium than the person would be required to pay if not for the false statement or concealment of a material fact; or (iii) Controlled substance benefits by knowingly, willfully and with the intent to deceive, failing to disclose to a physician, nurse practitioner, ancillary staff, or other health care provider from whom the person obtains a controlled substance, or a prescription for a controlled substance, that the person has received either the same controlled substance or a prescription for the same controlled substance, or a controlled substance of similar therapeutic use or a prescription for a controlled substance of similar therapeutic use, from another practitioner within the previous thirty (30) days and the person used TennCare to obtain the benefits. (B) An offense under subdivision (a)(1)(A) is a Class D felony. In addition to restitution, a person who pleads guilty or nolo contendere or is found guilty of violating this section shall be fined: (i) Two hundred fifty dollars ($250) for the first offense; (ii) Five hundred dollars ($500) for the second offense; and (iii) One thousand dollars ($1,000) for a third or subsequent offense. (C) The fines authorized under subdivision (a)(1)(B) shall be collected by the county court clerk with five percent (5%) of the fine going to the clerk of the court and the remaining ninety-five percent (95%) of the fine transmitted to the state treasurer on a monthly basis for deposit in the general fund.
(A) A person, including an enrollee, recipient, or applicant, commits an offense who knowingly obtains, or attempts to obtain, or aids or abets any person to obtain, by means of a willfully false statement, representation, or impersonation, or by concealment of any material fact, or by any other fraudulent means, or in any manner not authorized by any rule, regulation, or statute governing TennCare: (i) Medical assistance benefits or any assistance provided pursuant to any rule, regulation, procedure, or statute governing TennCare to which such person is not entitled, or of a greater value than that to which such person is authorized; (ii) Benefits by knowingly making a willfully false statement, or concealing a material fact relating to personal or household income, thereby resulting in the assessment of a lower monthly premium than the person would be required to pay if not for the false statement or concealment of a material fact; or (iii) Controlled substance benefits by knowingly, willfully and with the intent to deceive, failing to disclose to a physician, nurse practitioner, ancillary staff, or other health care provider from whom the person obtains a controlled substance, or a prescription for a controlled substance, that the person has received either the same controlled substance or a prescription for the same controlled substance, or a controlled substance of similar therapeutic use or a prescription for a controlled substance of similar therapeutic use, from another practitioner within the previous thirty (30) days and the person used TennCare to obtain the benefits.
(i) Medical assistance benefits or any assistance provided pursuant to any rule, regulation, procedure, or statute governing TennCare to which such person is not entitled, or of a greater value than that to which such person is authorized;
(ii) Benefits by knowingly making a willfully false statement, or concealing a material fact relating to personal or household income, thereby resulting in the assessment of a lower monthly premium than the person would be required to pay if not for the false statement or concealment of a material fact; or
(iii) Controlled substance benefits by knowingly, willfully and with the intent to deceive, failing to disclose to a physician, nurse practitioner, ancillary staff, or other health care provider from whom the person obtains a controlled substance, or a prescription for a controlled substance, that the person has received either the same controlled substance or a prescription for the same controlled substance, or a controlled substance of similar therapeutic use or a prescription for a controlled substance of similar therapeutic use, from another practitioner within the previous thirty (30) days and the person used TennCare to obtain the benefits.
(B) An offense under subdivision (a)(1)(A) is a Class D felony. In addition to restitution, a person who pleads guilty or nolo contendere or is found guilty of violating this section shall be fined: (i) Two hundred fifty dollars ($250) for the first offense; (ii) Five hundred dollars ($500) for the second offense; and (iii) One thousand dollars ($1,000) for a third or subsequent offense.
(i) Two hundred fifty dollars ($250) for the first offense;
(ii) Five hundred dollars ($500) for the second offense; and
(iii) One thousand dollars ($1,000) for a third or subsequent offense.
(C) The fines authorized under subdivision (a)(1)(B) shall be collected by the county court clerk with five percent (5%) of the fine going to the clerk of the court and the remaining ninety-five percent (95%) of the fine transmitted to the state treasurer on a monthly basis for deposit in the general fund.
(2) (A) A person, firm, corporation, partnership or any other entity, including a vendor, other than an enrollee, recipient, or applicant, commits an offense who knowingly obtains, or attempts to obtain, or aids or abets any person or entity to obtain, by means of a willfully false statement, report, representation, claim or impersonation, or by concealment of any material fact, or by any other fraudulent means, including knowingly presenting or causing to be presented to TennCare or any of its contractors, subcontractors or vendors a false or fraudulent claim for payment or approval, or in any manner not authorized by any rule, regulation, procedure, or statute governing TennCare, medical assistance payments provided pursuant to any rule, regulation, procedure, or statute governing TennCare to which the person or entity is not entitled, or of a greater value than that to which the person or entity is authorized. For purposes of this subsection (a), "attempts to obtain" includes making or presenting to any person a claim for any payment under any rule, regulation, procedure, or statute governing TennCare, knowing the claim to be false, fictitious or fraudulent. (B) An offense under subdivision (a)(2)(A) is a Class D felony unless the value of the property or services obtained meets the threshold set for a Class B or Class C offense under § 39-14-105 , in which case the appropriate higher class shall apply. In addition to any other penalty, a sentence that includes a fine, when imposed upon an entity or upon a person for actions benefiting an entity, shall include the corporation fine specified in § 40-35-111 .
(A) A person, firm, corporation, partnership or any other entity, including a vendor, other than an enrollee, recipient, or applicant, commits an offense who knowingly obtains, or attempts to obtain, or aids or abets any person or entity to obtain, by means of a willfully false statement, report, representation, claim or impersonation, or by concealment of any material fact, or by any other fraudulent means, including knowingly presenting or causing to be presented to TennCare or any of its contractors, subcontractors or vendors a false or fraudulent claim for payment or approval, or in any manner not authorized by any rule, regulation, procedure, or statute governing TennCare, medical assistance payments provided pursuant to any rule, regulation, procedure, or statute governing TennCare to which the person or entity is not entitled, or of a greater value than that to which the person or entity is authorized. For purposes of this subsection (a), "attempts to obtain" includes making or presenting to any person a claim for any payment under any rule, regulation, procedure, or statute governing TennCare, knowing the claim to be false, fictitious or fraudulent.
(B) An offense under subdivision (a)(2)(A) is a Class D felony unless the value of the property or services obtained meets the threshold set for a Class B or Class C offense under § 39-14-105 , in which case the appropriate higher class shall apply. In addition to any other penalty, a sentence that includes a fine, when imposed upon an entity or upon a person for actions benefiting an entity, shall include the corporation fine specified in § 40-35-111 .
(3) (A) A person, firm, corporation, partnership or any other entity commits an offense when providing a willfully false statement regarding another's medical condition or eligibility for insurance, to aid or abet another in obtaining or attempting to obtain medical assistance payments, medical assistance benefits or any assistance provided under any rule, regulation, procedure, or statute governing TennCare to which the person is not entitled or to a greater value than that to which such person is authorized. For purposes of this subsection (a), "attempting to obtain" includes making or presenting to any person a claim for any payment under any rule, regulation, procedure, or statute governing TennCare, knowing such claim to be false, fictitious or fraudulent. (B) An offense under subdivision (a)(3)(A) is a Class D felony unless the value of the property or services obtained meets the threshold set for a Class B or Class C offense under § 39-14-105 , in which case the appropriate higher class shall apply. In addition to any other penalty, a sentence that includes a fine, when imposed upon an entity or upon a person for actions benefiting an entity, shall include the corporation fine specified in § 40-35-111 .
(A) A person, firm, corporation, partnership or any other entity commits an offense when providing a willfully false statement regarding another's medical condition or eligibility for insurance, to aid or abet another in obtaining or attempting to obtain medical assistance payments, medical assistance benefits or any assistance provided under any rule, regulation, procedure, or statute governing TennCare to which the person is not entitled or to a greater value than that to which such person is authorized. For purposes of this subsection (a), "attempting to obtain" includes making or presenting to any person a claim for any payment under any rule, regulation, procedure, or statute governing TennCare, knowing such claim to be false, fictitious or fraudulent.
(B) An offense under subdivision (a)(3)(A) is a Class D felony unless the value of the property or services obtained meets the threshold set for a Class B or Class C offense under § 39-14-105 , in which case the appropriate higher class shall apply. In addition to any other penalty, a sentence that includes a fine, when imposed upon an entity or upon a person for actions benefiting an entity, shall include the corporation fine specified in § 40-35-111 .
(4) Any person, firm, corporation, partnership or other entity is guilty of a Class D felony that, in connection with the investigation of a violation of offenses set forth in this section, knowingly and willfully: (A) Falsifies, conceals or omits by any trick, scheme, artifice, or device a material fact; (B) Makes any materially false, fictitious or fraudulent statement or representation; or (C) Makes or uses any materially false writing or document.
(A) Falsifies, conceals or omits by any trick, scheme, artifice, or device a material fact;
(B) Makes any materially false, fictitious or fraudulent statement or representation; or
(C) Makes or uses any materially false writing or document.
(5) (A) A person commits an offense who knowingly sells, delivers, or aids and abets any person in the sale or delivery of a drug and used TennCare to obtain the drug. (B) As used in this subdivision (a)(5), "drug", "deliver" and "delivery" shall have the same meaning as set forth in § 39-17-402 . (C) This subdivision (a)(5) shall not apply to any duly licensed physician, nurse practitioner, pharmacist, or other provider authorized to issue or dispense a prescription acting in good faith in the course of that person's profession. (D) An offense under this subdivision (a)(5) is a Class D felony.
(A) A person commits an offense who knowingly sells, delivers, or aids and abets any person in the sale or delivery of a drug and used TennCare to obtain the drug.
(B) As used in this subdivision (a)(5), "drug", "deliver" and "delivery" shall have the same meaning as set forth in § 39-17-402 .
(C) This subdivision (a)(5) shall not apply to any duly licensed physician, nurse practitioner, pharmacist, or other provider authorized to issue or dispense a prescription acting in good faith in the course of that person's profession.
(D) An offense under this subdivision (a)(5) is a Class D felony.
(b) In addition to any other penalties provided for any person, firm, corporation, partnership or other entity under subsection (a), the court shall also: (1) (A) Order restitution to TennCare in the greater of the total amount of all medical assistance payments made to all providers, or the total amount of all payments to a managed care entity, related to the services underlying the offense; and (B) Report the person or entity to the appropriate professional licensure board or the department of commerce and insurance for disciplinary action. (2) In addition to any other penalties provided under this section, the court may also, to the full extent permitted by federal law and the TennCare waiver as interpreted by the CMS, order any such person or entity disqualified from participation in the medical assistance program; such disqualification may also apply to any person who is convicted of a criminal offense involving the selling of prescription drugs obtained through the TennCare program. Any person or entity disqualified from participation in the medical assistance program shall make restitution in the total amount of the medical assistance or underpayment which forms the basis for the conviction before such person or entity can reenroll in the TennCare program. (3) A subsequent denial of eligibility or denial of a claim for payment does not, of itself, establish proof of falsity of a statement, representation, report or claim for payment under subsection (a).
(1) (A) Order restitution to TennCare in the greater of the total amount of all medical assistance payments made to all providers, or the total amount of all payments to a managed care entity, related to the services underlying the offense; and (B) Report the person or entity to the appropriate professional licensure board or the department of commerce and insurance for disciplinary action.
(A) Order restitution to TennCare in the greater of the total amount of all medical assistance payments made to all providers, or the total amount of all payments to a managed care entity, related to the services underlying the offense; and
(B) Report the person or entity to the appropriate professional licensure board or the department of commerce and insurance for disciplinary action.
(2) In addition to any other penalties provided under this section, the court may also, to the full extent permitted by federal law and the TennCare waiver as interpreted by the CMS, order any such person or entity disqualified from participation in the medical assistance program; such disqualification may also apply to any person who is convicted of a criminal offense involving the selling of prescription drugs obtained through the TennCare program. Any person or entity disqualified from participation in the medical assistance program shall make restitution in the total amount of the medical assistance or underpayment which forms the basis for the conviction before such person or entity can reenroll in the TennCare program.
(3) A subsequent denial of eligibility or denial of a claim for payment does not, of itself, establish proof of falsity of a statement, representation, report or claim for payment under subsection (a).
(c) Nothing in this section shall be construed as prohibiting a person or entity violating this section from being prosecuted for theft of property or services under title 39, chapter 14.
(d) In addition to any other remedy available, including those provided in this section, the state may recover from any person or such person's estate, or from a firm, corporation, partnership or other entity, including a vendor, the amount of medical assistance benefits or payments improperly paid as a result of fraudulent means or actions not authorized by any rule, regulation, procedure, or statute governing TennCare.
(e) Notwithstanding any other law to the contrary, prosecutions for violations of this section shall be commenced within four (4) years after the commission of the offense.
Amended by 2016 Tenn. Acts, ch. 744,s 2, eff. 7/1/2016.
Amended by 2016 Tenn. Acts, ch. 744,s 1, eff. 7/1/2016.
Amended by 2013 Tenn. Acts, ch. 159,Secs.s1, s2 eff. 4/16/2013.
Acts 2004, ch. 784, § 1; 2007, ch. 103, § 1; 2007, ch. 458, §§ 1, 2; 2008, ch. 1139, § 1.
Tenn. Code Ann. § 71-5-1309 — TN Code / Title 71 / Chapter 5 / Section 71-5-1309
Funding
Status: in_force

This part shall have no application unless funding is specifically provided for and included in the general appropriations act. During any fiscal year, payments under this part shall not exceed the level of funding specifically provided for such purposes within the general appropriations act. Acts 1992, ch. 954, § 1.
This part shall have no application unless funding is specifically provided for and included in the general appropriations act. During any fiscal year, payments under this part shall not exceed the level of funding specifically provided for such purposes within the general appropriations act.
Acts 1992, ch. 954, § 1.
Tenn. Code Ann. § 71-5-705 — TN Code / Title 71 / Chapter 5 / Section 71-5-705
Program description
Status: in_force

The director shall ensure that the buy-in program: (1) Provides categorically needy scope of care; (2) Provides home- and community-based long-term services and supports for an enrollee who meets the functional requirements for those programs, is approved for those services, and chooses to enroll in the buy-in program; (3) Approves coverage for six (6) months effective the first of the month in which a person applies and meets program requirements; (4) Allows a person who is eligible for another TennCare program to choose not to participate in the buy-in program; and (5) Deems a person ineligible for buy-in program coverage for a month in which the person received TennCare benefits under the medically needy program. Added by 2024 Tenn. Acts, ch. 1002,s 1, eff. 5/21/2024.
The director shall ensure that the buy-in program:
(1) Provides categorically needy scope of care;
(2) Provides home- and community-based long-term services and supports for an enrollee who meets the functional requirements for those programs, is approved for those services, and chooses to enroll in the buy-in program;
(3) Approves coverage for six (6) months effective the first of the month in which a person applies and meets program requirements;
(4) Allows a person who is eligible for another TennCare program to choose not to participate in the buy-in program; and
(5) Deems a person ineligible for buy-in program coverage for a month in which the person received TennCare benefits under the medically needy program.
Added by 2024 Tenn. Acts, ch. 1002,s 1, eff. 5/21/2024.
Tenn. Code Ann. § 71-2-307 — TN Code / Title 71 / Chapter 2 / Section 71-2-307
Charge for assistance in obtaining aid - Misdemeanor
Status: in_force

(a) It is unlawful for any person, firm or corporation to directly or indirectly either charge or receive anything of value for assisting any person in making application to the proper authorities of this state for medical assistance under this part. (b) A violation of this section is a Class C misdemeanor. Acts 1961, ch. 96, § 13; T.C.A., §§ 14-1613, 14-3-107; Acts 1989, ch. 591, § 113.
(a) It is unlawful for any person, firm or corporation to directly or indirectly either charge or receive anything of value for assisting any person in making application to the proper authorities of this state for medical assistance under this part.
(b) A violation of this section is a Class C misdemeanor.
Acts 1961, ch. 96, § 13; T.C.A., §§ 14-1613, 14-3-107; Acts 1989, ch. 591, § 113.
Tenn. Code Ann. § 71-3-106 — TN Code / Title 71 / Chapter 3 / Section 71-3-106
Reserved
Status: repealed

Repealed by 2013 Tenn. Acts, ch. 454, s 6, eff. 5/16/2013. Acts 1996, ch. 950, § 7; T.C.A., § 71-3-156.
Repealed by 2013 Tenn. Acts, ch. 454, s 6, eff. 5/16/2013.
Acts 1996, ch. 950, § 7; T.C.A., § 71-3-156.
Tenn. Code Ann. § 71-5-2502 — TN Code / Title 71 / Chapter 5 / Section 71-5-2502
Office of inspector general
Status: in_force

There is created a division of state government which shall be known and designated as the office of inspector general. This division shall be located within the department of finance and administration and shall report directly to the commissioner of finance and administration. The office of inspector general shall be headed by an inspector general. The office of inspector general shall be separate and distinct from the TennCare bureau and the medicaid fraud control unit (MFCU). Acts 2004, ch. 673, § 20; 2005, ch. 474, §§ 8, 9.
There is created a division of state government which shall be known and designated as the office of inspector general. This division shall be located within the department of finance and administration and shall report directly to the commissioner of finance and administration. The office of inspector general shall be headed by an inspector general. The office of inspector general shall be separate and distinct from the TennCare bureau and the medicaid fraud control unit (MFCU).
Acts 2004, ch. 673, § 20; 2005, ch. 474, §§ 8, 9.
Tenn. Code Ann. § 71-4-602 — TN Code / Title 71 / Chapter 4 / Section 71-4-602
Part definitions
Status: in_force

As used in this part, unless the context otherwise requires: (1) "Blind individual" means any person whose visual acuity with maximum correction does not exceed 20/200 in the better eye, except that in those instances in which the visual acuity exceeds 20/200 but is accompanied by a limitation in the fields of vision such that the widest diameter of the visual field subtends an angle no greater than 20 degrees (20°), visual acuity is not a factor limiting eligibility. Those clients with serious eye disabilities not covered by this subdivision (1) will be accepted for services when referred to the division by the division of vocational rehabilitation, in the department of education; provided, that such referrals are supported by appropriate justification, and that the client is otherwise eligible. Likewise, when it is determined through careful evaluation of all factors that a client who is eligible under this subdivision (1) for services of the division can more adequately be served by the division of vocational rehabilitation, such client will be referred to that agency for services and will be accepted; provided, that the referral is justified by supporting evidence and the client is otherwise eligible for the services of that agency; (2) "Blind individual with an employment barrier" means a person who is blind, and whose blindness constitutes a substantial barrier to employment; (3) "Commissioner" means the commissioner of human services; (4) "Department" means the department of human services; (5) "Director" means the director of the division of services for the blind; (6) "Division" means the division of services for the blind in the department of human services; (7) "Eligible individual with employment barriers" when used with respect to diagnostic and related services, training guidance and placement, means any blind individual with a disability who is a citizen of this state, whose vocational rehabilitation is determined feasible by the division of vocational rehabilitation, and when used with respect to other vocational rehabilitation services, means an individual meeting the requirements of this subdivision (7) who is also found by the division to require financial assistance with respect to vocational rehabilitation services, after full consideration of the person's eligibility for any similar benefit by the way of pension, compensation and insurance; (8) "Establishment of a workshop or rehabilitation facility" means: (A) In the case of a workshop, the construction of a new building or the expansion, remodeling, or alteration of existing buildings, necessary to adapt such buildings to workshop purposes or to increase the employment opportunities in workshops, and the acquisition of initial equipment necessary for new workshops or to increase the employment opportunities in workshops; and (B) In the case of a rehabilitation facility, the construction of a new building or the expansion, remodeling, or alteration of existing buildings, and initial equipment of such buildings, necessary to adapt such buildings to rehabilitation facility purposes or to increase their effectiveness for such purposes and initial staffing; (9) "Maintenance" means the provision of money on behalf of a blind individual with employment barriers to cover the necessary living expenses, and health and maintenance essential to achieving the individual's vocational rehabilitation; (10) "Nonprofit," when used with respect to a rehabilitation facility or a workshop, means a rehabilitation facility and a workshop, respectively, owned and operated by a corporation or association, no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual and the income of which is exempt from taxation under § 101(6) of the Internal Revenue Code ( 26 U.S.C. § 101(6) ); (11) "Physical restoration" includes: (A) Corrective surgery or therapeutic treatment necessary to correct or substantially modify a physical or mental condition that is stable or slowly progressive and that constitutes a substantial barrier to employment, or that necessitates institutional care or attendant care, but that is of such a nature that such correction or modification may reasonably be expected to eliminate or substantially reduce such barrier within a reasonable length of time, and includes psychiatric treatment, dentistry, physical therapy, occupational therapy, speech or hearing therapy, treatment of medical complications and emergencies that are associated with or arise out of physical restoration services or are inherent in the conditions under treatment, and other medical services related to rehabilitation; (B) Necessary hospitalization, either inpatient or outpatient, nursing or rest home care, in connection with surgery or treatment specified in subdivision (11)(A); (C) Prosthetic devices essential to obtaining or retaining employment, or to achieving such ability of independent living as to dispense with the need for expensive institutional care or dispense with or largely dispense with the need of an attendant at home; (12) "Prosthetic appliance" means any appliance designed to support or take the place of a part of the body, or to increase the acuity of a sensory organ; (13) "Rehabilitation facility" means a facility operated for the primary purpose of assisting in the rehabilitation of physically handicapped individuals: (A) That provides one (1) or more of the following types of services: (i) Testing, fitting, or training in the use of prosthetic devices; (ii) Prevocational or conditioning therapy; (iii) Physical or occupational therapy; (iv) Adjustment training; or (v) Evaluation or control of special disabilities; or (B) Through which is provided an integrated program of medical, psychological, social, and vocational evaluation and services under competent professional supervision; (14) "Remunerative occupation" includes employment as an employee or self-employed, practice of a profession, homemaking or farm and family work for which payment is in kind rather than cash, sheltered employment, and home industry or other homebound work of a remunerative nature; (15) "Vocational rehabilitation" means making an individual able, or increasing an individual's ability to: (A) Engage in a remunerative occupation; or (B) Dispense with or largely dispense with the need of an attendant at home or expensive institutional care, through providing the individual needed vocational rehabilitation services; (16) "Vocational rehabilitation services" means: (A) Diagnostic and related services, including transportation, incidental to the determination of whether an individual is a blind individual with employment barriers, and if so, the individual's eligibility for, and the nature and scope of other vocational rehabilitation services to be provided; and (B) The following services provided eligible blind individuals with employment barriers needing such services: (i) Training; (ii) Guidance; (iii) Placement; (iv) Maintenance, not exceeding the estimated costs of subsistence during vocational rehabilitation; (v) Occupational licenses, tools, equipment, initial stocks, including livestock, and supplies, including equipment and initial stocks and supplies for vending stands, books, and training materials to any or all of which the state may retain title; (vi) Transportation, other than provided as diagnostic and related services; and (vii) Physical restoration; and (17) "Workshop" means a place where any manufacture or handiwork is carried on and that is operated for the primary purpose of providing remunerative employment to individuals with severe disabilities who cannot be readily absorbed in the competitive labor market. Acts 1955, ch. 243, § 3; 1957, ch. 79, § 1; 1959, ch. 174, § 1; impl. am. Acts 1975, ch. 219, §§ 1 (a, b), 2 (a, b); Acts 1977, ch. 19, § 1; T.C.A., §§ 14-626, 14-14-402; Acts 2011 , ch. 47, §§ 98 - 103.
As used in this part, unless the context otherwise requires:
(1) "Blind individual" means any person whose visual acuity with maximum correction does not exceed 20/200 in the better eye, except that in those instances in which the visual acuity exceeds 20/200 but is accompanied by a limitation in the fields of vision such that the widest diameter of the visual field subtends an angle no greater than 20 degrees (20°), visual acuity is not a factor limiting eligibility. Those clients with serious eye disabilities not covered by this subdivision (1) will be accepted for services when referred to the division by the division of vocational rehabilitation, in the department of education; provided, that such referrals are supported by appropriate justification, and that the client is otherwise eligible. Likewise, when it is determined through careful evaluation of all factors that a client who is eligible under this subdivision (1) for services of the division can more adequately be served by the division of vocational rehabilitation, such client will be referred to that agency for services and will be accepted; provided, that the referral is justified by supporting evidence and the client is otherwise eligible for the services of that agency;
(2) "Blind individual with an employment barrier" means a person who is blind, and whose blindness constitutes a substantial barrier to employment;
(3) "Commissioner" means the commissioner of human services;
(4) "Department" means the department of human services;
(5) "Director" means the director of the division of services for the blind;
(6) "Division" means the division of services for the blind in the department of human services;
(7) "Eligible individual with employment barriers" when used with respect to diagnostic and related services, training guidance and placement, means any blind individual with a disability who is a citizen of this state, whose vocational rehabilitation is determined feasible by the division of vocational rehabilitation, and when used with respect to other vocational rehabilitation services, means an individual meeting the requirements of this subdivision (7) who is also found by the division to require financial assistance with respect to vocational rehabilitation services, after full consideration of the person's eligibility for any similar benefit by the way of pension, compensation and insurance;
(8) "Establishment of a workshop or rehabilitation facility" means: (A) In the case of a workshop, the construction of a new building or the expansion, remodeling, or alteration of existing buildings, necessary to adapt such buildings to workshop purposes or to increase the employment opportunities in workshops, and the acquisition of initial equipment necessary for new workshops or to increase the employment opportunities in workshops; and (B) In the case of a rehabilitation facility, the construction of a new building or the expansion, remodeling, or alteration of existing buildings, and initial equipment of such buildings, necessary to adapt such buildings to rehabilitation facility purposes or to increase their effectiveness for such purposes and initial staffing;
(A) In the case of a workshop, the construction of a new building or the expansion, remodeling, or alteration of existing buildings, necessary to adapt such buildings to workshop purposes or to increase the employment opportunities in workshops, and the acquisition of initial equipment necessary for new workshops or to increase the employment opportunities in workshops; and
(B) In the case of a rehabilitation facility, the construction of a new building or the expansion, remodeling, or alteration of existing buildings, and initial equipment of such buildings, necessary to adapt such buildings to rehabilitation facility purposes or to increase their effectiveness for such purposes and initial staffing;
(9) "Maintenance" means the provision of money on behalf of a blind individual with employment barriers to cover the necessary living expenses, and health and maintenance essential to achieving the individual's vocational rehabilitation;
(10) "Nonprofit," when used with respect to a rehabilitation facility or a workshop, means a rehabilitation facility and a workshop, respectively, owned and operated by a corporation or association, no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual and the income of which is exempt from taxation under § 101(6) of the Internal Revenue Code ( 26 U.S.C. § 101(6) );
(11) "Physical restoration" includes: (A) Corrective surgery or therapeutic treatment necessary to correct or substantially modify a physical or mental condition that is stable or slowly progressive and that constitutes a substantial barrier to employment, or that necessitates institutional care or attendant care, but that is of such a nature that such correction or modification may reasonably be expected to eliminate or substantially reduce such barrier within a reasonable length of time, and includes psychiatric treatment, dentistry, physical therapy, occupational therapy, speech or hearing therapy, treatment of medical complications and emergencies that are associated with or arise out of physical restoration services or are inherent in the conditions under treatment, and other medical services related to rehabilitation; (B) Necessary hospitalization, either inpatient or outpatient, nursing or rest home care, in connection with surgery or treatment specified in subdivision (11)(A); (C) Prosthetic devices essential to obtaining or retaining employment, or to achieving such ability of independent living as to dispense with the need for expensive institutional care or dispense with or largely dispense with the need of an attendant at home;
(A) Corrective surgery or therapeutic treatment necessary to correct or substantially modify a physical or mental condition that is stable or slowly progressive and that constitutes a substantial barrier to employment, or that necessitates institutional care or attendant care, but that is of such a nature that such correction or modification may reasonably be expected to eliminate or substantially reduce such barrier within a reasonable length of time, and includes psychiatric treatment, dentistry, physical therapy, occupational therapy, speech or hearing therapy, treatment of medical complications and emergencies that are associated with or arise out of physical restoration services or are inherent in the conditions under treatment, and other medical services related to rehabilitation;
(B) Necessary hospitalization, either inpatient or outpatient, nursing or rest home care, in connection with surgery or treatment specified in subdivision (11)(A);
(C) Prosthetic devices essential to obtaining or retaining employment, or to achieving such ability of independent living as to dispense with the need for expensive institutional care or dispense with or largely dispense with the need of an attendant at home;
(12) "Prosthetic appliance" means any appliance designed to support or take the place of a part of the body, or to increase the acuity of a sensory organ;
(13) "Rehabilitation facility" means a facility operated for the primary purpose of assisting in the rehabilitation of physically handicapped individuals: (A) That provides one (1) or more of the following types of services: (i) Testing, fitting, or training in the use of prosthetic devices; (ii) Prevocational or conditioning therapy; (iii) Physical or occupational therapy; (iv) Adjustment training; or (v) Evaluation or control of special disabilities; or (B) Through which is provided an integrated program of medical, psychological, social, and vocational evaluation and services under competent professional supervision;
(A) That provides one (1) or more of the following types of services: (i) Testing, fitting, or training in the use of prosthetic devices; (ii) Prevocational or conditioning therapy; (iii) Physical or occupational therapy; (iv) Adjustment training; or (v) Evaluation or control of special disabilities; or
(i) Testing, fitting, or training in the use of prosthetic devices;
(ii) Prevocational or conditioning therapy;
(iii) Physical or occupational therapy;
(iv) Adjustment training; or
(v) Evaluation or control of special disabilities; or
(B) Through which is provided an integrated program of medical, psychological, social, and vocational evaluation and services under competent professional supervision;
(14) "Remunerative occupation" includes employment as an employee or self-employed, practice of a profession, homemaking or farm and family work for which payment is in kind rather than cash, sheltered employment, and home industry or other homebound work of a remunerative nature;
(15) "Vocational rehabilitation" means making an individual able, or increasing an individual's ability to: (A) Engage in a remunerative occupation; or (B) Dispense with or largely dispense with the need of an attendant at home or expensive institutional care, through providing the individual needed vocational rehabilitation services;
(A) Engage in a remunerative occupation; or
(B) Dispense with or largely dispense with the need of an attendant at home or expensive institutional care, through providing the individual needed vocational rehabilitation services;
(16) "Vocational rehabilitation services" means: (A) Diagnostic and related services, including transportation, incidental to the determination of whether an individual is a blind individual with employment barriers, and if so, the individual's eligibility for, and the nature and scope of other vocational rehabilitation services to be provided; and (B) The following services provided eligible blind individuals with employment barriers needing such services: (i) Training; (ii) Guidance; (iii) Placement; (iv) Maintenance, not exceeding the estimated costs of subsistence during vocational rehabilitation; (v) Occupational licenses, tools, equipment, initial stocks, including livestock, and supplies, including equipment and initial stocks and supplies for vending stands, books, and training materials to any or all of which the state may retain title; (vi) Transportation, other than provided as diagnostic and related services; and (vii) Physical restoration; and
(A) Diagnostic and related services, including transportation, incidental to the determination of whether an individual is a blind individual with employment barriers, and if so, the individual's eligibility for, and the nature and scope of other vocational rehabilitation services to be provided; and
(B) The following services provided eligible blind individuals with employment barriers needing such services: (i) Training; (ii) Guidance; (iii) Placement; (iv) Maintenance, not exceeding the estimated costs of subsistence during vocational rehabilitation; (v) Occupational licenses, tools, equipment, initial stocks, including livestock, and supplies, including equipment and initial stocks and supplies for vending stands, books, and training materials to any or all of which the state may retain title; (vi) Transportation, other than provided as diagnostic and related services; and (vii) Physical restoration; and
(i) Training;
(ii) Guidance;
(iii) Placement;
(iv) Maintenance, not exceeding the estimated costs of subsistence during vocational rehabilitation;
(v) Occupational licenses, tools, equipment, initial stocks, including livestock, and supplies, including equipment and initial stocks and supplies for vending stands, books, and training materials to any or all of which the state may retain title;
(vi) Transportation, other than provided as diagnostic and related services; and
(vii) Physical restoration; and
(17) "Workshop" means a place where any manufacture or handiwork is carried on and that is operated for the primary purpose of providing remunerative employment to individuals with severe disabilities who cannot be readily absorbed in the competitive labor market.
Acts 1955, ch. 243, § 3; 1957, ch. 79, § 1; 1959, ch. 174, § 1; impl. am. Acts 1975, ch. 219, §§ 1 (a, b), 2 (a, b); Acts 1977, ch. 19, § 1; T.C.A., §§ 14-626, 14-14-402; Acts 2011 , ch. 47, §§ 98 - 103.
Tenn. Code Ann. § 71-4-2103 — TN Code / Title 71 / Chapter 4 / Section 71-4-2103
Members - Terms - Meetings - Reimbursement for expenses
Status: in_force

(a) The council for the deaf, deaf-blind, and hard of hearing shall consist of eighteen (18) members and shall be composed as follows: the commissioners of education, human services, health, mental health and substance abuse, and safety or their designees, the assistant commissioner of rehabilitation services or the assistant commissioner's designee, a representative of the Tennessee public utility commission, a representative of the Tennessee Emergency Management Agency, the president of the Tennessee Association of the Deaf, two (2) deaf consumer representatives appointed by the governor, one (1) president of a Hearing Loss Association of America chapter, two (2) hard of hearing consumer representatives appointed by the governor, the president of the Tennessee Registry of Interpreters for the Deaf, the president of the Tennessee Hands & Voices, one (1) deaf-blind representative who may be appointed by the governor from lists of qualified persons submitted by interested deaf-blind groups including, but not limited to, the Tennessee Organization of the Deaf-Blind and the Tennessee Deaf-Blind Association, and one (1) minority representative who may be appointed by the governor from lists of qualified persons submitted by interested minority deaf advocate groups including, but not limited to, chapters of the Tennessee Black Deaf Advocates. In appointing the deaf-blind representative and the minority representative to the council as provided in this subsection (a), the governor shall consult with interested deaf-blind and minority deaf advocate groups to determine qualified persons to fill the positions. (b) The deaf, deaf-blind and hard of hearing representatives shall serve terms of three (3) years, except that to ensure staggered terms, the governor shall designate that two (2) of the six (6) members initially appointed to serve a one-year term, two (2) to serve two-year terms, and two (2) to serve three-year terms. Any position that becomes vacant prior to the expiration of a full term shall be filled only for the period of the unexpired term. In making appointments to the council for the deaf, deaf-blind, and hard of hearing, the governor shall strive to ensure that at least one (1) person appointed to serve on the council is sixty (60) years of age or older. (c) (1) The commissioner of education shall call the first meeting of the council, at which time, and annually thereafter, the members shall elect a chair. Thereafter, the council shall meet at the call of the chair, but at least quarterly. (2) (A) Council members shall attend at least fifty percent (50%) of the required quarterly meetings. (B) Any council member who fails to attend meetings as required in subdivision (c)(2)(A) shall be removed as a member by the appointing authority. (d) Members of the council shall receive no compensation for their services other than reimbursement for traveling and other expenses incurred in the performance of their official duties. All reimbursement for travel expenses shall be in accordance with the comprehensive travel regulations as promulgated by the department of finance and administration and approved by the attorney general and reporter. Amended by 2017 Tenn. Acts, ch. 94,s 76, eff. 4/4/2017. Amended by 2015 Tenn. Acts, ch. 36,s 3, eff. 3/27/2015. Amended by 2013 Tenn. Acts, ch. 455,s 1, eff. 7/1/2013. Acts 1978, ch. 889, § 3; 1979, ch. 106, § 1; T.C.A., §§ 14-2503, 14-18-103; Acts 1987, ch. 6, § 4; 1988, ch. 1013, § 75; 2001, ch. 174, § 15; 2010, ch. 1100, § 138.
(a) The council for the deaf, deaf-blind, and hard of hearing shall consist of eighteen (18) members and shall be composed as follows: the commissioners of education, human services, health, mental health and substance abuse, and safety or their designees, the assistant commissioner of rehabilitation services or the assistant commissioner's designee, a representative of the Tennessee public utility commission, a representative of the Tennessee Emergency Management Agency, the president of the Tennessee Association of the Deaf, two (2) deaf consumer representatives appointed by the governor, one (1) president of a Hearing Loss Association of America chapter, two (2) hard of hearing consumer representatives appointed by the governor, the president of the Tennessee Registry of Interpreters for the Deaf, the president of the Tennessee Hands & Voices, one (1) deaf-blind representative who may be appointed by the governor from lists of qualified persons submitted by interested deaf-blind groups including, but not limited to, the Tennessee Organization of the Deaf-Blind and the Tennessee Deaf-Blind Association, and one (1) minority representative who may be appointed by the governor from lists of qualified persons submitted by interested minority deaf advocate groups including, but not limited to, chapters of the Tennessee Black Deaf Advocates. In appointing the deaf-blind representative and the minority representative to the council as provided in this subsection (a), the governor shall consult with interested deaf-blind and minority deaf advocate groups to determine qualified persons to fill the positions.
(b) The deaf, deaf-blind and hard of hearing representatives shall serve terms of three (3) years, except that to ensure staggered terms, the governor shall designate that two (2) of the six (6) members initially appointed to serve a one-year term, two (2) to serve two-year terms, and two (2) to serve three-year terms. Any position that becomes vacant prior to the expiration of a full term shall be filled only for the period of the unexpired term. In making appointments to the council for the deaf, deaf-blind, and hard of hearing, the governor shall strive to ensure that at least one (1) person appointed to serve on the council is sixty (60) years of age or older.
(c) (1) The commissioner of education shall call the first meeting of the council, at which time, and annually thereafter, the members shall elect a chair. Thereafter, the council shall meet at the call of the chair, but at least quarterly. (2) (A) Council members shall attend at least fifty percent (50%) of the required quarterly meetings. (B) Any council member who fails to attend meetings as required in subdivision (c)(2)(A) shall be removed as a member by the appointing authority.
(1) The commissioner of education shall call the first meeting of the council, at which time, and annually thereafter, the members shall elect a chair. Thereafter, the council shall meet at the call of the chair, but at least quarterly.
(2) (A) Council members shall attend at least fifty percent (50%) of the required quarterly meetings. (B) Any council member who fails to attend meetings as required in subdivision (c)(2)(A) shall be removed as a member by the appointing authority.
(A) Council members shall attend at least fifty percent (50%) of the required quarterly meetings.
(B) Any council member who fails to attend meetings as required in subdivision (c)(2)(A) shall be removed as a member by the appointing authority.
(d) Members of the council shall receive no compensation for their services other than reimbursement for traveling and other expenses incurred in the performance of their official duties. All reimbursement for travel expenses shall be in accordance with the comprehensive travel regulations as promulgated by the department of finance and administration and approved by the attorney general and reporter.
Amended by 2017 Tenn. Acts, ch. 94,s 76, eff. 4/4/2017.
Amended by 2015 Tenn. Acts, ch. 36,s 3, eff. 3/27/2015.
Amended by 2013 Tenn. Acts, ch. 455,s 1, eff. 7/1/2013.
Acts 1978, ch. 889, § 3; 1979, ch. 106, § 1; T.C.A., §§ 14-2503, 14-18-103; Acts 1987, ch. 6, § 4; 1988, ch. 1013, § 75; 2001, ch. 174, § 15; 2010, ch. 1100, § 138.
Tenn. Code Ann. § 71-5-143 — TN Code / Title 71 / Chapter 5 / Section 71-5-143
TennCare advisory commission - Composition - Purpose - Expert assistance - Confidentiality - Conflict - Compensation
Status: in_force

(a) There is established in the department of finance and administration a TennCare advisory commission. The advisory commission will be separate and distinct from the bureau of TennCare but will be allowed access to all data concerning the operations, management, and program functions of the TennCare program, including information relevant to the TennCare program held or maintained by other state agencies. In accordance with 45 CFR 160.101 et seq., members of the advisory commission will provide nonpaid consulting services to the bureau of TennCare and may have access to protected health information to the extent necessary to perform their advisory function. (b) The advisory commission shall be appointed by the governor and will be composed of thirteen (13) members who should reflect the broad impact that the TennCare program has on this state. The membership of the advisory commission shall include one (1) representative of the advocacy community; the chair of the health committee of the house of representatives, or the chair's designee; the chair of the health and welfare committee of the senate, or the chair's designee; two (2) representatives from the Tennessee business community; and three (3) representatives from the provider community. In addition, the membership of the advisory commission shall include one (1) person chosen by the governor from a list of three (3) persons nominated by the speaker of the house of representatives, and one (1) person chosen by the governor from a list of three (3) persons nominated by the speaker of the senate. If the governor does not choose a commissioner member from the initial list of three (3) persons nominated by each speaker, the appropriate speaker shall submit another list of three (3) persons for the governor's consideration. In making the appointments, the governor shall strive to ensure that the advisory commission's membership is representative of the state's geographic and demographic composition with appropriate attention to the representation of women and minorities. In making the initial appointments, the governor will designate three (3) initial appointees to serve until December 31, 2005, four (4) initial appointees to serve until December 31, 2006, and four (4) initial appointees to serve until December 31, 2007. Except for initial appointments, members shall be appointed to three-year terms. At the time of the initial appointments of the advisory commission, the governor shall appoint a chair and vice-chair of the commission from the membership of the commission who shall serve until December 31, 2005. The governor shall thereafter appoint a chair and vice-chair to one-year terms from the membership of the commission. (c) The purpose of the commission is to review annually the health care operations including, but not limited to, cost-management analysis, benefits, enrollment, eligibility, costs, and performance of the TennCare program and to make recommendations to the governor regarding cost-containment strategies and cost-effective program improvements. Such recommendations by the commission will include an assessment of the effectiveness of the existing TennCare program, specific steps that could be taken to reduce program costs, and an evaluation of whether the program is optimizing its use of resources to best meet the needs of TennCare enrollees. Proposed modifications submitted by the commission that may result in increased program expenditures should be accompanied by recommendations to achieve commensurate savings in other program areas in order to achieve overall management of program costs. The commission shall present its recommendations in writing to the governor no later than November 10 of each year. (d) Subject to an appropriation set forth in the general appropriations act, the commission will have the power to engage expert assistance in accordance with the state procurement processes. The department of finance and administration will provide the commission with appropriate staff and assistance. (e) Members of the advisory commission shall maintain strict standards of confidentiality in the handling of all matters before the commission in accordance with federal and state law. All material and information, regardless of form, medium, or method of communication, provided to or acquired by a member or the commission staff in the course of the commission's work, shall be regarded as confidential information and shall not be disclosed and are deemed not to be a public record. In addition, all material and information, regardless of form, medium, or method of communication, made or generated by a member or the commission staff in the course of the commission's work, shall be regarded as confidential information and shall not be disclosed and are not public records. All necessary steps shall be taken by members and staff to safeguard the confidentiality of such material or information in conformance with federal and state law. (f) Items or matters discussed by the commission may from time to time present real or apparent conflicts for members of the commission. Due to the importance of the commission's work and the advisory nature of its recommendations, in the event that a matter being considered by the commission presents a real or apparent conflict of interest, the affected member of the commission shall disclose the conflict to the chair but shall be allowed to discuss and take official action on the particular matter. The professional backgrounds of each member of the advisory commission as well as any conflicts disclosed by a member to the chair during a given year shall be reported in the commission's recommendations as set forth in subsection (c) of this section. (g) Members shall receive no compensation for their services on the commission but may be reimbursed for those expenses allowed by the comprehensive travel regulations promulgated by the department of finance and administration and approved by the attorney general and reporter. Amended by 2016 Tenn. Acts, ch. 1079,s 6, eff. 7/1/2016. Amended by 2016 Tenn. Acts, ch. 1079,s 5, eff. 7/1/2016. Acts 2004, ch. 673, § 3.
(a) There is established in the department of finance and administration a TennCare advisory commission. The advisory commission will be separate and distinct from the bureau of TennCare but will be allowed access to all data concerning the operations, management, and program functions of the TennCare program, including information relevant to the TennCare program held or maintained by other state agencies. In accordance with 45 CFR 160.101 et seq., members of the advisory commission will provide nonpaid consulting services to the bureau of TennCare and may have access to protected health information to the extent necessary to perform their advisory function.
(b) The advisory commission shall be appointed by the governor and will be composed of thirteen (13) members who should reflect the broad impact that the TennCare program has on this state. The membership of the advisory commission shall include one (1) representative of the advocacy community; the chair of the health committee of the house of representatives, or the chair's designee; the chair of the health and welfare committee of the senate, or the chair's designee; two (2) representatives from the Tennessee business community; and three (3) representatives from the provider community. In addition, the membership of the advisory commission shall include one (1) person chosen by the governor from a list of three (3) persons nominated by the speaker of the house of representatives, and one (1) person chosen by the governor from a list of three (3) persons nominated by the speaker of the senate. If the governor does not choose a commissioner member from the initial list of three (3) persons nominated by each speaker, the appropriate speaker shall submit another list of three (3) persons for the governor's consideration. In making the appointments, the governor shall strive to ensure that the advisory commission's membership is representative of the state's geographic and demographic composition with appropriate attention to the representation of women and minorities. In making the initial appointments, the governor will designate three (3) initial appointees to serve until December 31, 2005, four (4) initial appointees to serve until December 31, 2006, and four (4) initial appointees to serve until December 31, 2007. Except for initial appointments, members shall be appointed to three-year terms. At the time of the initial appointments of the advisory commission, the governor shall appoint a chair and vice-chair of the commission from the membership of the commission who shall serve until December 31, 2005. The governor shall thereafter appoint a chair and vice-chair to one-year terms from the membership of the commission.
(c) The purpose of the commission is to review annually the health care operations including, but not limited to, cost-management analysis, benefits, enrollment, eligibility, costs, and performance of the TennCare program and to make recommendations to the governor regarding cost-containment strategies and cost-effective program improvements. Such recommendations by the commission will include an assessment of the effectiveness of the existing TennCare program, specific steps that could be taken to reduce program costs, and an evaluation of whether the program is optimizing its use of resources to best meet the needs of TennCare enrollees. Proposed modifications submitted by the commission that may result in increased program expenditures should be accompanied by recommendations to achieve commensurate savings in other program areas in order to achieve overall management of program costs. The commission shall present its recommendations in writing to the governor no later than November 10 of each year.
(d) Subject to an appropriation set forth in the general appropriations act, the commission will have the power to engage expert assistance in accordance with the state procurement processes. The department of finance and administration will provide the commission with appropriate staff and assistance.
(e) Members of the advisory commission shall maintain strict standards of confidentiality in the handling of all matters before the commission in accordance with federal and state law. All material and information, regardless of form, medium, or method of communication, provided to or acquired by a member or the commission staff in the course of the commission's work, shall be regarded as confidential information and shall not be disclosed and are deemed not to be a public record. In addition, all material and information, regardless of form, medium, or method of communication, made or generated by a member or the commission staff in the course of the commission's work, shall be regarded as confidential information and shall not be disclosed and are not public records. All necessary steps shall be taken by members and staff to safeguard the confidentiality of such material or information in conformance with federal and state law.
(f) Items or matters discussed by the commission may from time to time present real or apparent conflicts for members of the commission. Due to the importance of the commission's work and the advisory nature of its recommendations, in the event that a matter being considered by the commission presents a real or apparent conflict of interest, the affected member of the commission shall disclose the conflict to the chair but shall be allowed to discuss and take official action on the particular matter. The professional backgrounds of each member of the advisory commission as well as any conflicts disclosed by a member to the chair during a given year shall be reported in the commission's recommendations as set forth in subsection (c) of this section.
(g) Members shall receive no compensation for their services on the commission but may be reimbursed for those expenses allowed by the comprehensive travel regulations promulgated by the department of finance and administration and approved by the attorney general and reporter.
Amended by 2016 Tenn. Acts, ch. 1079,s 6, eff. 7/1/2016.
Amended by 2016 Tenn. Acts, ch. 1079,s 5, eff. 7/1/2016.
Acts 2004, ch. 673, § 3.
Tenn. Code Ann. § 71-5-2003 — TN Code / Title 71 / Chapter 5 / Section 71-5-2003
[Expires 7/1/2025] Annual coverage assessment on covered hospitals
Status: in_force

(a) There is imposed on covered hospitals an annual coverage assessment for fiscal year (FY) 2024-2025 as set forth in this part, such that the total assessment on all covered hospitals in the aggregate will be equal to six percent (6%) of the federally recognized annual coverage assessment base. (b) The annual coverage assessment imposed by this part is not effective and validly imposed until the division has provided the Tennessee Hospital Association with written notice that includes: (1) (A) A determination from CMS that the annual coverage assessment is a permissible source of revenue that does not adversely affect the amount of federal financial participation in the division; and (B) Approval from CMS of an adjustment to the budget neutrality agreement with CMS, pursuant to the process set forth in the special terms and conditions in the division's 1115 demonstration project; (2) (A) Approval from CMS for the distribution of the full amount of directed payments to hospitals for TennCare services as described in § 71-5-2005(d)(2) as long as an assessment installment is not collected prior to the distribution of the installment of the directed payments; or (B) The rules promulgated by the division pursuant to § 71-5-2004(k)(2) ; and (3) Confirmation that all contracts between hospitals and managed care organizations comply with the hospital payment rate variation corridors set forth in § 71-5-161 . (c) The general assembly intends that the proceeds of the annual coverage assessment are not to be used as a justification to reduce or eliminate state funding to the division. The annual coverage assessment is not effective and validly imposed if the coverage or the amount of revenue available for expenditure by the division in FY 2024-2025 is less than: (1) The governor's FY 2024-2025 recommended budget level; plus (2) Additional appropriations made by the general assembly to the division for FY 2024-2025, except to the extent new federal funding is available to replace funds that are appropriated as described in subdivision (c)(1) and that are above the amount that the state receives from CMS under the regular federal matching assistance percentage. (d) (1) (A) The general assembly intends that the proceeds of the annual coverage assessment are not to be used as justification for a division managed care organization to implement across-the-board rate reductions to negotiated rates with covered or excluded hospitals or physicians in existence on July 1, 2024. For those rates in effect on July 1, 2024, the division shall include provisions in the managed care organizations' contractor risk agreements that prohibit the managed care organizations from implementing across-the-board rate reductions to covered or excluded network hospitals or physicians by specific service, category, or type of provider. The requirements of the preceding sentence also apply to services or settings of care that are ancillary to the primary license of a covered or excluded hospital or physician, but do not apply to reductions in benefits or reimbursement for the ancillary services if the reductions: (i) Are different from those items being funded in § 71-5-2005(d) ; and (ii) Have been communicated in advance of implementation to the general assembly and the Tennessee Hospital Association. (B) As used in this subsection (d): (i) "Physician" includes a physician licensed under title 63, chapter 6 or 9, and a group practice of physicians that holds a contract with a managed care organization; (ii) "Services or settings of care that are ancillary" includes ambulatory surgical facilities, free standing emergency departments, outpatient treatment clinics or imaging centers, dialysis centers, home health and related services, home infusion therapy services, outpatient rehabilitation, or skilled nursing services; and (iii) "Services or settings of care that are ancillary to the primary license of a covered or excluded hospital or physician" include services where the physician or covered or excluded hospital, including a wholly owned subsidiary or controlled affiliate of a covered or excluded hospital or hospital system, holds more than a fifty percent (50%) controlling interest in the ancillary services or settings of care, but does not include other ancillary services or settings of care. For across-the-board rate reductions to ancillary services or settings of care, the division shall include appropriate requirements for notice to providers in the managed care organizations' contractor risk agreements. (2) This subsection (d) does not preclude good faith negotiations between managed care organizations and covered or excluded hospitals, hospital systems, and between managed care organizations and physicians on an individualized, case-by-case basis. This subsection (d) does not serve as justification for managed care organizations, covered or excluded hospitals, hospital systems, or physicians to unreasonably deny a party the ability to enter into individualized, case-by-case good faith negotiations. Good faith negotiation necessarily implies mutual cooperation between the negotiating parties and may include, but is not limited to, the right to terminate contractual agreements; the ability to modify negotiated rates, pricing, or units of service; the ability to alter payment methodologies; and the ability to enforce existing managed care techniques or to implement new managed care techniques. (3) This subsection (d) does not preclude the full implementation of § 71-5-161 . (4) Notwithstanding this subsection (d), if CMS mandates a TennCare program change or a change is required by state or federal law that impacts rates, and that change is required to be implemented by the managed care organizations in accordance with their contracts, or if the annual coverage assessment becomes invalid, then this part does not prohibit the managed care organizations from implementing a rate change as may be mandated by the division or by state or federal law. Amended by 2024 Tenn. Acts, ch. 953,s 1, eff. 6/30/2024. Added by 2023 Tenn. Acts, ch. 232, s 1, eff. 6/30/2023.
(a) There is imposed on covered hospitals an annual coverage assessment for fiscal year (FY) 2024-2025 as set forth in this part, such that the total assessment on all covered hospitals in the aggregate will be equal to six percent (6%) of the federally recognized annual coverage assessment base.
(b) The annual coverage assessment imposed by this part is not effective and validly imposed until the division has provided the Tennessee Hospital Association with written notice that includes: (1) (A) A determination from CMS that the annual coverage assessment is a permissible source of revenue that does not adversely affect the amount of federal financial participation in the division; and (B) Approval from CMS of an adjustment to the budget neutrality agreement with CMS, pursuant to the process set forth in the special terms and conditions in the division's 1115 demonstration project; (2) (A) Approval from CMS for the distribution of the full amount of directed payments to hospitals for TennCare services as described in § 71-5-2005(d)(2) as long as an assessment installment is not collected prior to the distribution of the installment of the directed payments; or (B) The rules promulgated by the division pursuant to § 71-5-2004(k)(2) ; and (3) Confirmation that all contracts between hospitals and managed care organizations comply with the hospital payment rate variation corridors set forth in § 71-5-161 .
(1) (A) A determination from CMS that the annual coverage assessment is a permissible source of revenue that does not adversely affect the amount of federal financial participation in the division; and (B) Approval from CMS of an adjustment to the budget neutrality agreement with CMS, pursuant to the process set forth in the special terms and conditions in the division's 1115 demonstration project;
(A) A determination from CMS that the annual coverage assessment is a permissible source of revenue that does not adversely affect the amount of federal financial participation in the division; and
(B) Approval from CMS of an adjustment to the budget neutrality agreement with CMS, pursuant to the process set forth in the special terms and conditions in the division's 1115 demonstration project;
(2) (A) Approval from CMS for the distribution of the full amount of directed payments to hospitals for TennCare services as described in § 71-5-2005(d)(2) as long as an assessment installment is not collected prior to the distribution of the installment of the directed payments; or (B) The rules promulgated by the division pursuant to § 71-5-2004(k)(2) ; and
(A) Approval from CMS for the distribution of the full amount of directed payments to hospitals for TennCare services as described in § 71-5-2005(d)(2) as long as an assessment installment is not collected prior to the distribution of the installment of the directed payments; or
(B) The rules promulgated by the division pursuant to § 71-5-2004(k)(2) ; and
(3) Confirmation that all contracts between hospitals and managed care organizations comply with the hospital payment rate variation corridors set forth in § 71-5-161 .
(c) The general assembly intends that the proceeds of the annual coverage assessment are not to be used as a justification to reduce or eliminate state funding to the division. The annual coverage assessment is not effective and validly imposed if the coverage or the amount of revenue available for expenditure by the division in FY 2024-2025 is less than: (1) The governor's FY 2024-2025 recommended budget level; plus (2) Additional appropriations made by the general assembly to the division for FY 2024-2025, except to the extent new federal funding is available to replace funds that are appropriated as described in subdivision (c)(1) and that are above the amount that the state receives from CMS under the regular federal matching assistance percentage.
(1) The governor's FY 2024-2025 recommended budget level; plus
(2) Additional appropriations made by the general assembly to the division for FY 2024-2025, except to the extent new federal funding is available to replace funds that are appropriated as described in subdivision (c)(1) and that are above the amount that the state receives from CMS under the regular federal matching assistance percentage.
(d) (1) (A) The general assembly intends that the proceeds of the annual coverage assessment are not to be used as justification for a division managed care organization to implement across-the-board rate reductions to negotiated rates with covered or excluded hospitals or physicians in existence on July 1, 2024. For those rates in effect on July 1, 2024, the division shall include provisions in the managed care organizations' contractor risk agreements that prohibit the managed care organizations from implementing across-the-board rate reductions to covered or excluded network hospitals or physicians by specific service, category, or type of provider. The requirements of the preceding sentence also apply to services or settings of care that are ancillary to the primary license of a covered or excluded hospital or physician, but do not apply to reductions in benefits or reimbursement for the ancillary services if the reductions: (i) Are different from those items being funded in § 71-5-2005(d) ; and (ii) Have been communicated in advance of implementation to the general assembly and the Tennessee Hospital Association. (B) As used in this subsection (d): (i) "Physician" includes a physician licensed under title 63, chapter 6 or 9, and a group practice of physicians that holds a contract with a managed care organization; (ii) "Services or settings of care that are ancillary" includes ambulatory surgical facilities, free standing emergency departments, outpatient treatment clinics or imaging centers, dialysis centers, home health and related services, home infusion therapy services, outpatient rehabilitation, or skilled nursing services; and (iii) "Services or settings of care that are ancillary to the primary license of a covered or excluded hospital or physician" include services where the physician or covered or excluded hospital, including a wholly owned subsidiary or controlled affiliate of a covered or excluded hospital or hospital system, holds more than a fifty percent (50%) controlling interest in the ancillary services or settings of care, but does not include other ancillary services or settings of care. For across-the-board rate reductions to ancillary services or settings of care, the division shall include appropriate requirements for notice to providers in the managed care organizations' contractor risk agreements. (2) This subsection (d) does not preclude good faith negotiations between managed care organizations and covered or excluded hospitals, hospital systems, and between managed care organizations and physicians on an individualized, case-by-case basis. This subsection (d) does not serve as justification for managed care organizations, covered or excluded hospitals, hospital systems, or physicians to unreasonably deny a party the ability to enter into individualized, case-by-case good faith negotiations. Good faith negotiation necessarily implies mutual cooperation between the negotiating parties and may include, but is not limited to, the right to terminate contractual agreements; the ability to modify negotiated rates, pricing, or units of service; the ability to alter payment methodologies; and the ability to enforce existing managed care techniques or to implement new managed care techniques. (3) This subsection (d) does not preclude the full implementation of § 71-5-161 . (4) Notwithstanding this subsection (d), if CMS mandates a TennCare program change or a change is required by state or federal law that impacts rates, and that change is required to be implemented by the managed care organizations in accordance with their contracts, or if the annual coverage assessment becomes invalid, then this part does not prohibit the managed care organizations from implementing a rate change as may be mandated by the division or by state or federal law.
(1) (A) The general assembly intends that the proceeds of the annual coverage assessment are not to be used as justification for a division managed care organization to implement across-the-board rate reductions to negotiated rates with covered or excluded hospitals or physicians in existence on July 1, 2024. For those rates in effect on July 1, 2024, the division shall include provisions in the managed care organizations' contractor risk agreements that prohibit the managed care organizations from implementing across-the-board rate reductions to covered or excluded network hospitals or physicians by specific service, category, or type of provider. The requirements of the preceding sentence also apply to services or settings of care that are ancillary to the primary license of a covered or excluded hospital or physician, but do not apply to reductions in benefits or reimbursement for the ancillary services if the reductions: (i) Are different from those items being funded in § 71-5-2005(d) ; and (ii) Have been communicated in advance of implementation to the general assembly and the Tennessee Hospital Association. (B) As used in this subsection (d): (i) "Physician" includes a physician licensed under title 63, chapter 6 or 9, and a group practice of physicians that holds a contract with a managed care organization; (ii) "Services or settings of care that are ancillary" includes ambulatory surgical facilities, free standing emergency departments, outpatient treatment clinics or imaging centers, dialysis centers, home health and related services, home infusion therapy services, outpatient rehabilitation, or skilled nursing services; and (iii) "Services or settings of care that are ancillary to the primary license of a covered or excluded hospital or physician" include services where the physician or covered or excluded hospital, including a wholly owned subsidiary or controlled affiliate of a covered or excluded hospital or hospital system, holds more than a fifty percent (50%) controlling interest in the ancillary services or settings of care, but does not include other ancillary services or settings of care. For across-the-board rate reductions to ancillary services or settings of care, the division shall include appropriate requirements for notice to providers in the managed care organizations' contractor risk agreements.
(A) The general assembly intends that the proceeds of the annual coverage assessment are not to be used as justification for a division managed care organization to implement across-the-board rate reductions to negotiated rates with covered or excluded hospitals or physicians in existence on July 1, 2024. For those rates in effect on July 1, 2024, the division shall include provisions in the managed care organizations' contractor risk agreements that prohibit the managed care organizations from implementing across-the-board rate reductions to covered or excluded network hospitals or physicians by specific service, category, or type of provider. The requirements of the preceding sentence also apply to services or settings of care that are ancillary to the primary license of a covered or excluded hospital or physician, but do not apply to reductions in benefits or reimbursement for the ancillary services if the reductions: (i) Are different from those items being funded in § 71-5-2005(d) ; and (ii) Have been communicated in advance of implementation to the general assembly and the Tennessee Hospital Association.
(i) Are different from those items being funded in § 71-5-2005(d) ; and
(ii) Have been communicated in advance of implementation to the general assembly and the Tennessee Hospital Association.
(B) As used in this subsection (d): (i) "Physician" includes a physician licensed under title 63, chapter 6 or 9, and a group practice of physicians that holds a contract with a managed care organization; (ii) "Services or settings of care that are ancillary" includes ambulatory surgical facilities, free standing emergency departments, outpatient treatment clinics or imaging centers, dialysis centers, home health and related services, home infusion therapy services, outpatient rehabilitation, or skilled nursing services; and (iii) "Services or settings of care that are ancillary to the primary license of a covered or excluded hospital or physician" include services where the physician or covered or excluded hospital, including a wholly owned subsidiary or controlled affiliate of a covered or excluded hospital or hospital system, holds more than a fifty percent (50%) controlling interest in the ancillary services or settings of care, but does not include other ancillary services or settings of care. For across-the-board rate reductions to ancillary services or settings of care, the division shall include appropriate requirements for notice to providers in the managed care organizations' contractor risk agreements.
(i) "Physician" includes a physician licensed under title 63, chapter 6 or 9, and a group practice of physicians that holds a contract with a managed care organization;
(ii) "Services or settings of care that are ancillary" includes ambulatory surgical facilities, free standing emergency departments, outpatient treatment clinics or imaging centers, dialysis centers, home health and related services, home infusion therapy services, outpatient rehabilitation, or skilled nursing services; and
(iii) "Services or settings of care that are ancillary to the primary license of a covered or excluded hospital or physician" include services where the physician or covered or excluded hospital, including a wholly owned subsidiary or controlled affiliate of a covered or excluded hospital or hospital system, holds more than a fifty percent (50%) controlling interest in the ancillary services or settings of care, but does not include other ancillary services or settings of care. For across-the-board rate reductions to ancillary services or settings of care, the division shall include appropriate requirements for notice to providers in the managed care organizations' contractor risk agreements.
(2) This subsection (d) does not preclude good faith negotiations between managed care organizations and covered or excluded hospitals, hospital systems, and between managed care organizations and physicians on an individualized, case-by-case basis. This subsection (d) does not serve as justification for managed care organizations, covered or excluded hospitals, hospital systems, or physicians to unreasonably deny a party the ability to enter into individualized, case-by-case good faith negotiations. Good faith negotiation necessarily implies mutual cooperation between the negotiating parties and may include, but is not limited to, the right to terminate contractual agreements; the ability to modify negotiated rates, pricing, or units of service; the ability to alter payment methodologies; and the ability to enforce existing managed care techniques or to implement new managed care techniques.
(3) This subsection (d) does not preclude the full implementation of § 71-5-161 .
(4) Notwithstanding this subsection (d), if CMS mandates a TennCare program change or a change is required by state or federal law that impacts rates, and that change is required to be implemented by the managed care organizations in accordance with their contracts, or if the annual coverage assessment becomes invalid, then this part does not prohibit the managed care organizations from implementing a rate change as may be mandated by the division or by state or federal law.
Amended by 2024 Tenn. Acts, ch. 953,s 1, eff. 6/30/2024.
Added by 2023 Tenn. Acts, ch. 232, s 1, eff. 6/30/2023.
Tenn. Code Ann. § 71-5-2005 — TN Code / Title 71 / Chapter 5 / Section 71-5-2005
[Expires 7/1/2025] Deposits in maintenance of coverage trust fund - Expenditures - Quarterly reports
Status: in_force

(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 division's program by the general assembly or to replace monies appropriated outside of the division's program. (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, 2024; (2) All annual coverage assessments received by the division; (3) Investment earnings credited to the assets of the maintenance of coverage trust fund; (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; and (5) Intergovernmental transfer of funds from hospitals determined by the division as eligible to certify public expenditures for the purpose of securing federal medical assistance percentage payments up to three hundred million dollars ($300,000,000). (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 division only for expenditures in the division's program and include the following purposes: (1) Expenditures for benefits and services under the division's program, including those that would have been subject to reduction or elimination from the division's funding for FY 2024-2025, 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 division's 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); (D) Unless otherwise addressed in a separate appropriation for FY 2024-2025, 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 division enrollee; (F) Avoidance of coverage limitations relative to the number of nonemergency outpatient visits per year for a division enrollee; (G) Avoidance of coverage limitations relative to the number of physician office visits per year for a division enrollee; (H) Avoidance of coverage limitations relative to the number of laboratory and diagnostic imaging encounters per year for a division enrollee; (I) Maintenance of coverage for occupational therapy, physical therapy, and speech therapy services; (J) In the total amount of five hundred ninety thousand seven hundred seventy dollars ($590,770) to maintain reimbursement at the same emergency care rate as in FY 2023-2024 for nonemergent care to children twelve (12) to twenty-four (24) months of age; (K) In the total amount of two million one hundred eleven thousand four hundred dollars ($2,111,400) to the division to offset the elimination of the provision in the division's 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 the division MCOs the benefit of 340B pricing; provided, however, if the division obtains approval from CMS for the adjustment to the budget neutrality agreement, as set forth in § 71-5-2003(b)(1)(B) , the expenditure authorized by this subdivision (d)(1)(K) is twenty million, five hundred seventy-nine thousand nine hundred dollars ($20,579,900); (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 division to support the division's 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, 2024; (2) Directed payments to hospitals for providing services to division patients and the uninsured, as approved by CMS and as set forth in this subdivision (d)(2): (A) Directed payments to hospitals will be made based on claims paid with the division's utilization and encounter data from the managed care organizations during each quarter of FY 2024-2025. A directed payment must be in an amount set by the division in consultation with the Tennessee Hospital Association and dependent on funding available through this section. The directed payment must include a quality program designed and implemented with the partnership and cooperation of the division and the Tennessee Hospital Association; (B) If CMS does not approve either the structure of directed payments set forth in subdivision (d)(2)(A) or provide a budget neutrality adjustment, then payments required by this subdivision (d)(2) must be in accordance with this subdivision (d)(2)(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 2024-2025. Each covered hospital is entitled to payments for FY 2024-2025 for providing services to division enrollees. The amount of payment to covered hospitals must be no less than thirty-seven percent (37%) of unreimbursed division costs for all hospitals licensed by the state that reported division charges, revenue, and total expenses on the 2022 JAR, excluding state-owned hospitals. As used in this subdivision (d)(2)(B), "unreimbursed division costs" means the excess of the division costs over the division's net revenue. The division's charges and net revenue are calculated using data from Schedule E, items (A)(l)(e) and (A)(l)(f), from the hospital's 2022 JAR filed with the department of health. As used in this subdivision (d)(2)(B), "division 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 2022 JAR, multiplied by the division's charges; (C) If CMS does not approve directed payments to hospitals set forth in either subdivision (d)(2)(A) or (d)(2)(B), but instead approves hospital supplemental pools in the division waiver, then payments must be made from the allocated pools to covered hospitals to offset losses incurred in providing services to division enrollees as first priority before any other supplemental payments authorized in the division waiver are distributed; (D) The payments required by this subdivision (d)(2) must be made in four (4) equal installments. The division 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; (E) Payments required by this subdivision (d)(2) may be made by the division directly or by the division managed care organizations with the direction to make payments to hospitals, or by a designee approved by the division, as required by this subsection (d). The payments to a hospital pursuant to this subdivision (d)(2) are not part of the reimbursement a hospital is entitled to under its contract with a division managed care organization; (F) In addition to the items and expenditures set forth in subdivisions (d)(1) and (2), other programs and initiatives developed by the division, in consultation with the Tennessee Hospital Association, to offset the unreimbursed costs of providing services to division 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)(2)(F) must be used to obtain federal matching funds to raise funds up to three hundred fifty million dollars ($350,000,000); (G) Refunds, in proportion to the amount paid in, to covered hospitals based on: (i) The payment of annual coverage assessments or penalties to the division through error, mistake, or a determination that the annual coverage assessment was invalidly imposed; or (ii) Circumstances where the division, 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) and (2); and (H) Payments authorized under rules promulgated by the division pursuant to § 71-5-2004(k)(2) ; (3) Administrative funding to the division for six (6) full-time state employees to assist with implementation, operationalization, and ongoing management of hospital payment programs in the amount of three hundred eighty-two thousand four hundred dollars ($382,400); and (4) Funding from the trust fund or assessment to offset any public hospital funding shortfalls for state directed payments. (e) The division shall modify the contracts with the division 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 division 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, 2024, the division 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. Amended by 2024 Tenn. Acts, ch. 953,s 1, eff. 6/30/2024. Amended by 2024 Tenn. Acts, ch. 953,s 3, eff. 5/9/2024. Amended by 2023 Tenn. Acts, ch. 232, s 2, eff. 4/25/2023. Added by 2023 Tenn. Acts, ch. 232, s 1, eff. 6/30/2023.
(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 division's program by the general assembly or to replace monies appropriated outside of the division's program.
(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, 2024; (2) All annual coverage assessments received by the division; (3) Investment earnings credited to the assets of the maintenance of coverage trust fund; (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; and (5) Intergovernmental transfer of funds from hospitals determined by the division as eligible to certify public expenditures for the purpose of securing federal medical assistance percentage payments up to three hundred million dollars ($300,000,000).
(1) The balance of the trust fund remaining as of June 30, 2024;
(2) All annual coverage assessments received by the division;
(3) Investment earnings credited to the assets of the maintenance of coverage trust fund;
(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; and
(5) Intergovernmental transfer of funds from hospitals determined by the division as eligible to certify public expenditures for the purpose of securing federal medical assistance percentage payments up to three hundred million dollars ($300,000,000).
(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 division only for expenditures in the division's program and include the following purposes: (1) Expenditures for benefits and services under the division's program, including those that would have been subject to reduction or elimination from the division's funding for FY 2024-2025, 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 division's 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); (D) Unless otherwise addressed in a separate appropriation for FY 2024-2025, 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 division enrollee; (F) Avoidance of coverage limitations relative to the number of nonemergency outpatient visits per year for a division enrollee; (G) Avoidance of coverage limitations relative to the number of physician office visits per year for a division enrollee; (H) Avoidance of coverage limitations relative to the number of laboratory and diagnostic imaging encounters per year for a division enrollee; (I) Maintenance of coverage for occupational therapy, physical therapy, and speech therapy services; (J) In the total amount of five hundred ninety thousand seven hundred seventy dollars ($590,770) to maintain reimbursement at the same emergency care rate as in FY 2023-2024 for nonemergent care to children twelve (12) to twenty-four (24) months of age; (K) In the total amount of two million one hundred eleven thousand four hundred dollars ($2,111,400) to the division to offset the elimination of the provision in the division's 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 the division MCOs the benefit of 340B pricing; provided, however, if the division obtains approval from CMS for the adjustment to the budget neutrality agreement, as set forth in § 71-5-2003(b)(1)(B) , the expenditure authorized by this subdivision (d)(1)(K) is twenty million, five hundred seventy-nine thousand nine hundred dollars ($20,579,900); (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 division to support the division's 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, 2024; (2) Directed payments to hospitals for providing services to division patients and the uninsured, as approved by CMS and as set forth in this subdivision (d)(2): (A) Directed payments to hospitals will be made based on claims paid with the division's utilization and encounter data from the managed care organizations during each quarter of FY 2024-2025. A directed payment must be in an amount set by the division in consultation with the Tennessee Hospital Association and dependent on funding available through this section. The directed payment must include a quality program designed and implemented with the partnership and cooperation of the division and the Tennessee Hospital Association; (B) If CMS does not approve either the structure of directed payments set forth in subdivision (d)(2)(A) or provide a budget neutrality adjustment, then payments required by this subdivision (d)(2) must be in accordance with this subdivision (d)(2)(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 2024-2025. Each covered hospital is entitled to payments for FY 2024-2025 for providing services to division enrollees. The amount of payment to covered hospitals must be no less than thirty-seven percent (37%) of unreimbursed division costs for all hospitals licensed by the state that reported division charges, revenue, and total expenses on the 2022 JAR, excluding state-owned hospitals. As used in this subdivision (d)(2)(B), "unreimbursed division costs" means the excess of the division costs over the division's net revenue. The division's charges and net revenue are calculated using data from Schedule E, items (A)(l)(e) and (A)(l)(f), from the hospital's 2022 JAR filed with the department of health. As used in this subdivision (d)(2)(B), "division 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 2022 JAR, multiplied by the division's charges; (C) If CMS does not approve directed payments to hospitals set forth in either subdivision (d)(2)(A) or (d)(2)(B), but instead approves hospital supplemental pools in the division waiver, then payments must be made from the allocated pools to covered hospitals to offset losses incurred in providing services to division enrollees as first priority before any other supplemental payments authorized in the division waiver are distributed; (D) The payments required by this subdivision (d)(2) must be made in four (4) equal installments. The division 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; (E) Payments required by this subdivision (d)(2) may be made by the division directly or by the division managed care organizations with the direction to make payments to hospitals, or by a designee approved by the division, as required by this subsection (d). The payments to a hospital pursuant to this subdivision (d)(2) are not part of the reimbursement a hospital is entitled to under its contract with a division managed care organization; (F) In addition to the items and expenditures set forth in subdivisions (d)(1) and (2), other programs and initiatives developed by the division, in consultation with the Tennessee Hospital Association, to offset the unreimbursed costs of providing services to division 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)(2)(F) must be used to obtain federal matching funds to raise funds up to three hundred fifty million dollars ($350,000,000); (G) Refunds, in proportion to the amount paid in, to covered hospitals based on: (i) The payment of annual coverage assessments or penalties to the division through error, mistake, or a determination that the annual coverage assessment was invalidly imposed; or (ii) Circumstances where the division, 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) and (2); and (H) Payments authorized under rules promulgated by the division pursuant to § 71-5-2004(k)(2) ; (3) Administrative funding to the division for six (6) full-time state employees to assist with implementation, operationalization, and ongoing management of hospital payment programs in the amount of three hundred eighty-two thousand four hundred dollars ($382,400); and (4) Funding from the trust fund or assessment to offset any public hospital funding shortfalls for state directed payments.
(1) Expenditures for benefits and services under the division's program, including those that would have been subject to reduction or elimination from the division's funding for FY 2024-2025, 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 division's 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); (D) Unless otherwise addressed in a separate appropriation for FY 2024-2025, 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 division enrollee; (F) Avoidance of coverage limitations relative to the number of nonemergency outpatient visits per year for a division enrollee; (G) Avoidance of coverage limitations relative to the number of physician office visits per year for a division enrollee; (H) Avoidance of coverage limitations relative to the number of laboratory and diagnostic imaging encounters per year for a division enrollee; (I) Maintenance of coverage for occupational therapy, physical therapy, and speech therapy services; (J) In the total amount of five hundred ninety thousand seven hundred seventy dollars ($590,770) to maintain reimbursement at the same emergency care rate as in FY 2023-2024 for nonemergent care to children twelve (12) to twenty-four (24) months of age; (K) In the total amount of two million one hundred eleven thousand four hundred dollars ($2,111,400) to the division to offset the elimination of the provision in the division's 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 the division MCOs the benefit of 340B pricing; provided, however, if the division obtains approval from CMS for the adjustment to the budget neutrality agreement, as set forth in § 71-5-2003(b)(1)(B) , the expenditure authorized by this subdivision (d)(1)(K) is twenty million, five hundred seventy-nine thousand nine hundred dollars ($20,579,900); (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 division to support the division's 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, 2024;
(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 division's 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);
(D) Unless otherwise addressed in a separate appropriation for FY 2024-2025, 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 division enrollee;
(F) Avoidance of coverage limitations relative to the number of nonemergency outpatient visits per year for a division enrollee;
(G) Avoidance of coverage limitations relative to the number of physician office visits per year for a division enrollee;
(H) Avoidance of coverage limitations relative to the number of laboratory and diagnostic imaging encounters per year for a division enrollee;
(I) Maintenance of coverage for occupational therapy, physical therapy, and speech therapy services;
(J) In the total amount of five hundred ninety thousand seven hundred seventy dollars ($590,770) to maintain reimbursement at the same emergency care rate as in FY 2023-2024 for nonemergent care to children twelve (12) to twenty-four (24) months of age;
(K) In the total amount of two million one hundred eleven thousand four hundred dollars ($2,111,400) to the division to offset the elimination of the provision in the division's 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 the division MCOs the benefit of 340B pricing; provided, however, if the division obtains approval from CMS for the adjustment to the budget neutrality agreement, as set forth in § 71-5-2003(b)(1)(B) , the expenditure authorized by this subdivision (d)(1)(K) is twenty million, five hundred seventy-nine thousand nine hundred dollars ($20,579,900);
(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 division to support the division's 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, 2024;
(2) Directed payments to hospitals for providing services to division patients and the uninsured, as approved by CMS and as set forth in this subdivision (d)(2): (A) Directed payments to hospitals will be made based on claims paid with the division's utilization and encounter data from the managed care organizations during each quarter of FY 2024-2025. A directed payment must be in an amount set by the division in consultation with the Tennessee Hospital Association and dependent on funding available through this section. The directed payment must include a quality program designed and implemented with the partnership and cooperation of the division and the Tennessee Hospital Association; (B) If CMS does not approve either the structure of directed payments set forth in subdivision (d)(2)(A) or provide a budget neutrality adjustment, then payments required by this subdivision (d)(2) must be in accordance with this subdivision (d)(2)(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 2024-2025. Each covered hospital is entitled to payments for FY 2024-2025 for providing services to division enrollees. The amount of payment to covered hospitals must be no less than thirty-seven percent (37%) of unreimbursed division costs for all hospitals licensed by the state that reported division charges, revenue, and total expenses on the 2022 JAR, excluding state-owned hospitals. As used in this subdivision (d)(2)(B), "unreimbursed division costs" means the excess of the division costs over the division's net revenue. The division's charges and net revenue are calculated using data from Schedule E, items (A)(l)(e) and (A)(l)(f), from the hospital's 2022 JAR filed with the department of health. As used in this subdivision (d)(2)(B), "division 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 2022 JAR, multiplied by the division's charges; (C) If CMS does not approve directed payments to hospitals set forth in either subdivision (d)(2)(A) or (d)(2)(B), but instead approves hospital supplemental pools in the division waiver, then payments must be made from the allocated pools to covered hospitals to offset losses incurred in providing services to division enrollees as first priority before any other supplemental payments authorized in the division waiver are distributed; (D) The payments required by this subdivision (d)(2) must be made in four (4) equal installments. The division 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; (E) Payments required by this subdivision (d)(2) may be made by the division directly or by the division managed care organizations with the direction to make payments to hospitals, or by a designee approved by the division, as required by this subsection (d). The payments to a hospital pursuant to this subdivision (d)(2) are not part of the reimbursement a hospital is entitled to under its contract with a division managed care organization; (F) In addition to the items and expenditures set forth in subdivisions (d)(1) and (2), other programs and initiatives developed by the division, in consultation with the Tennessee Hospital Association, to offset the unreimbursed costs of providing services to division 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)(2)(F) must be used to obtain federal matching funds to raise funds up to three hundred fifty million dollars ($350,000,000); (G) Refunds, in proportion to the amount paid in, to covered hospitals based on: (i) The payment of annual coverage assessments or penalties to the division through error, mistake, or a determination that the annual coverage assessment was invalidly imposed; or (ii) Circumstances where the division, 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) and (2); and (H) Payments authorized under rules promulgated by the division pursuant to § 71-5-2004(k)(2) ;
(A) Directed payments to hospitals will be made based on claims paid with the division's utilization and encounter data from the managed care organizations during each quarter of FY 2024-2025. A directed payment must be in an amount set by the division in consultation with the Tennessee Hospital Association and dependent on funding available through this section. The directed payment must include a quality program designed and implemented with the partnership and cooperation of the division and the Tennessee Hospital Association;
(B) If CMS does not approve either the structure of directed payments set forth in subdivision (d)(2)(A) or provide a budget neutrality adjustment, then payments required by this subdivision (d)(2) must be in accordance with this subdivision (d)(2)(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 2024-2025. Each covered hospital is entitled to payments for FY 2024-2025 for providing services to division enrollees. The amount of payment to covered hospitals must be no less than thirty-seven percent (37%) of unreimbursed division costs for all hospitals licensed by the state that reported division charges, revenue, and total expenses on the 2022 JAR, excluding state-owned hospitals. As used in this subdivision (d)(2)(B), "unreimbursed division costs" means the excess of the division costs over the division's net revenue. The division's charges and net revenue are calculated using data from Schedule E, items (A)(l)(e) and (A)(l)(f), from the hospital's 2022 JAR filed with the department of health. As used in this subdivision (d)(2)(B), "division 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 2022 JAR, multiplied by the division's charges;
(C) If CMS does not approve directed payments to hospitals set forth in either subdivision (d)(2)(A) or (d)(2)(B), but instead approves hospital supplemental pools in the division waiver, then payments must be made from the allocated pools to covered hospitals to offset losses incurred in providing services to division enrollees as first priority before any other supplemental payments authorized in the division waiver are distributed;
(D) The payments required by this subdivision (d)(2) must be made in four (4) equal installments. The division 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;
(E) Payments required by this subdivision (d)(2) may be made by the division directly or by the division managed care organizations with the direction to make payments to hospitals, or by a designee approved by the division, as required by this subsection (d). The payments to a hospital pursuant to this subdivision (d)(2) are not part of the reimbursement a hospital is entitled to under its contract with a division managed care organization;
(F) In addition to the items and expenditures set forth in subdivisions (d)(1) and (2), other programs and initiatives developed by the division, in consultation with the Tennessee Hospital Association, to offset the unreimbursed costs of providing services to division 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)(2)(F) must be used to obtain federal matching funds to raise funds up to three hundred fifty million dollars ($350,000,000);
(G) Refunds, in proportion to the amount paid in, to covered hospitals based on: (i) The payment of annual coverage assessments or penalties to the division through error, mistake, or a determination that the annual coverage assessment was invalidly imposed; or (ii) Circumstances where the division, 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) and (2); and
(i) The payment of annual coverage assessments or penalties to the division through error, mistake, or a determination that the annual coverage assessment was invalidly imposed; or
(ii) Circumstances where the division, 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) and (2); and
(H) Payments authorized under rules promulgated by the division pursuant to § 71-5-2004(k)(2) ;
(3) Administrative funding to the division for six (6) full-time state employees to assist with implementation, operationalization, and ongoing management of hospital payment programs in the amount of three hundred eighty-two thousand four hundred dollars ($382,400); and
(4) Funding from the trust fund or assessment to offset any public hospital funding shortfalls for state directed payments.
(e) The division shall modify the contracts with the division 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 division 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, 2024, the division 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.
(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.
Amended by 2024 Tenn. Acts, ch. 953,s 1, eff. 6/30/2024.
Amended by 2024 Tenn. Acts, ch. 953,s 3, eff. 5/9/2024.
Amended by 2023 Tenn. Acts, ch. 232, s 2, eff. 4/25/2023.
Added by 2023 Tenn. Acts, ch. 232, s 1, eff. 6/30/2023.
Tenn. Code Ann. § 71-5-122 — TN Code / Title 71 / Chapter 5 / Section 71-5-122
Statement of interest of vendors or suppliers holding equity interest in hospitals, apothecaries or nursing homes
Status: in_force

(a) Any individual or corporate vendor or provider participating under this part who holds an equity interest in any hospital, apothecary, nursing home, or other vendor or provider participating under this part shall submit annually to the department of finance and administration information disclosing their interest in these vendors or providers. (b) Any such party who fails to file the information required by this section shall not be entitled to participate in the program. Acts 1969, ch. 326, § 4; T.C.A., §§ 14-1923, 14-23-122.
(a) Any individual or corporate vendor or provider participating under this part who holds an equity interest in any hospital, apothecary, nursing home, or other vendor or provider participating under this part shall submit annually to the department of finance and administration information disclosing their interest in these vendors or providers.
(b) Any such party who fails to file the information required by this section shall not be entitled to participate in the program.
Acts 1969, ch. 326, § 4; T.C.A., §§ 14-1923, 14-23-122.