2023 Tennessee Code › Title 71 - WELFARE (§§ 71-1-101 — 71-7-103) › Chapter 5 - PROGRAMS AND SERVICES FOR POOR PERSONS (§§ 71-5-NEW — 71-5-2604) › Part 20 - ANNUAL COVERAGE ASSESSMENT ACT OF 2023 [For expiration, see Section 71-5-2006] (§§ 71-5-2001 — 71-5-2007) › Section 71-5-2004 - [Expires 7/1/2025] Amount of annual coverage assessment - Payment - Penalty - Suspension of payments - Civil action

(a)
Each covered hospital's annual assessment is a weighted portion of the annual coverage assessment base as determined under § 71-5-2002. The weight for each covered hospital must be determined in accordance with the hospital's classification for children's, tier 1, tier 2, tier 3, psychiatric, and safety net hospitals in the division DSH program. The weights determined pursuant to this subsection (a) are not a rule as defined in § 4-5-102 and are not subject to rulemaking under title 4, chapter 5, part 2. The division shall implement this section in a manner that complies with federal requirements necessary to ensure that the assessment qualifies for federal matching funds. The weights for:
(1) Children's hospitals are an inpatient weight of eight-tenths (0.8) and an outpatient weight of three-tenths (0.3);
(2) Tier 1 hospitals are an inpatient weight of one (1.0) and an outpatient weight of fifty-five hundredths (0.55);
(3) Tier 2 hospitals are an inpatient weight of seventy-five hundredths (0. 75) and an outpatient weight of three-tenths (0.3);
(4) Tier 3 hospitals are an inpatient weight of fifteen hundredths (0.15) and an outpatient weight of one hundred seventy-five thousandths (0.175);
(5) Psychiatric hospitals are an inpatient weight of eleven hundredths (0.11) and an outpatient weight of one (1.0);
(6) Safety net hospitals are an inpatient weight of one hundred thirty-three thousandths (0.133) and an outpatient weight of one hundred fifty-seven thousandths (0.157); and
(7) Any other hospitals eligible for the assessment have a weight of six percent (6%).
(b)
The division may, in consultation with the Tennessee Hospital Association, modify the amount of the individual percentages set forth in this section if necessary to comply with 42 CFR 433.68 or to address additional state appropriations.
(c)
The annual coverage assessment must be paid in installments pursuant to this subsection (c) if the requirements of § 71-5-2003(b) have been satisfied. The division shall establish a schedule of four (4) equal installment payments spread as evenly as possible throughout FY 2024-2025 with each installment payment due fifteen (15) days after the FY 2024-2025 directed payments approved by CMS to offset unreimbursed division costs have been made to hospitals.
(d)
To facilitate collection of the annual coverage assessment, the division shall send each covered hospital, at least thirty (30) days in advance of each installment payment due date, a notice of payment along with a return form developed by the division. Failure of a covered hospital to receive a notice and return form, however, does not relieve a covered hospital from the obligation of timely payment. The division shall also post the return form on its website.
(e)
Failure of a covered hospital to pay an installment of the annual coverage assessment, when due, results in an imposition of a penalty of five hundred dollars ($500) per day until the installment is paid in full. The division at its discretion may waive the penalty if the hospital establishes that it attempted to mail or electronically transfer payment to the state on or before the date the payment was due.
(f)
If a covered hospital ceases to operate or changes status to be an excluded hospital between July 1, 2024, and June 30, 2025, then the hospital's total annual coverage assessment is equal to its annual coverage assessment base multiplied by a fraction, the denominator of which is the number of calendar days from July 1, 2024, until July 1, 2025, and the numerator of which is the number of days from July 1, 2024, until the date the health facilities commission has recorded as the date that the hospital changed status or ceased operation.
(g)
If a covered hospital ceases operation prior to payment of its full annual coverage assessment, then the person controlling the hospital as of the date the hospital ceased operation is jointly and severally responsible for any remaining annual coverage assessment installments and unpaid penalties associated with previous late payments.
(h)
If a covered hospital is sold after July 1, 2024, and before July 1, 2025, then the seller is responsible for annual coverage assessment payments due for the period up to and including the date the sale is final. If the hospital continues to operate in this state and continues to meet the definition of a covered hospital in § 71-5-2002, then the new owner is responsible for paying all coverage assessment amounts due for the period beginning on the day after the date of the sale until July 1, 2025.
(i)
If a covered hospital fails to pay an installment of the annual coverage assessment within thirty (30) days of its due date, then the division must suspend the payments to the hospital required by § 71-5-2005(d)(2) until the installment is paid and report the failure to the department that licenses the covered hospital. Notwithstanding another law, failure, of a covered hospital to pay an installment of the annual coverage assessment or a refund required by this part is considered a license deficiency and grounds for disciplinary action as set forth in the statutes and rules under which the covered hospital is licensed.
(j)
In addition to the action required by subsection (h), the division is authorized to file a civil action against a covered hospital and its controlling person or persons to collect delinquent annual coverage assessment installments, late penalties, and refund obligations established by this part. Exclusive jurisdiction and venue for a civil action authorized by this subsection (j) is in the chancery court for Davidson County.
(k)
(1)
If a federal agency with jurisdiction over the annual coverage assessment determines that the annual coverage assessment is not a valid source of revenue or if there is a reduction of the coverage and funding of the division's program contrary to § 71-5-2003(c), or if the requirements of §§ 71-5-161 and 71-5-2003(b) are not fully satisfied, or if one (1) or more managed care organizations impose rate reductions contrary to § 71-5-2003(d), then:
(A)
Subsequent installments of the annual coverage assessment are not due and payable; and
(B)
Further payments must not be paid to hospitals pursuant to § 71-5-2005(d)(2) after the date of the event.
(2)
(A)
Notwithstanding this part, if CMS discontinues approval of or otherwise fails to approve the full amount of directed payments to hospitals for providing services to division enrollees as authorized under § 71-5-2005(d), then the division must suspend payments from or to covered hospitals otherwise required by this part and must promulgate rules that:
(i)
Establish the methodology for determining the amounts, categories, and times of payments to hospitals, if any, instead of the payments that otherwise would have been paid under § 71-5-2005(d)(2) if approved by CMS;
(ii)
Prioritize payments to hospitals as set forth in § 71-5-2005( d)(2);
(iii)
Identify the benefits and services for which funds will be available in order to mitigate reductions or eliminations that otherwise would be imposed in the absence of the coverage assessment;
(iv)
Determine the amount and timing of payments for benefits and services identified under subdivisions (k)(2)(A)(ii) and (iii), as appropriate;
(v)
Reinstitute payments from or to covered hospitals as appropriate; and
(vi)
Otherwise achieve the goals of this subdivision (k)(2).
(B)
The rules adopted under this subdivision (k)(2) must, to the extent possible, achieve the goals of:
(i)
Maximizing the amount of federal matching funds available for the division's program; and
(ii)
Minimizing the variation between payments hospitals will receive under the rules as compared to payments hospitals would have received if CMS had approved the total payments described in § 71-5-2005( d).
(C)
Notwithstanding another law, the division is authorized to exercise emergency rulemaking authority to the extent necessary to meet the objectives of this subdivision (k)(2).
(3)
Upon occurrence of an event set forth in subdivision (k)(1) or (k)(2), the division then has authority to make necessary changes to the division's budget to account for the loss of annual coverage assessment revenue.
(l)
A covered hospital or an association representing covered hospitals, the membership of which includes thirty (30) or more covered hospitals, has the right to file a petition for declaratory order pursuant to § 4-5-223 to determine if there has been a failure to meet the requirements of this part. A covered hospital shall not increase charges or add a surcharge based on, or as a result of, the annual coverage assessment.
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.