Senate Bill 334, also known as the "Tennessee Medicaid Modernization and Access Act of 2025," aims to amend Tennessee's Medicaid reimbursement structure under TennCare. The bill mandates that starting in calendar year 2025, TennCare reimbursements for key services—including obstetrics-gynecology, primary care, outpatient mental health, and substance use disorder services—must be updated to align with either the Medicare fee schedule or the average commercial rate, whichever is higher. The Department of Health, in consultation with the Bureau of TennCare, is tasked with conducting annual reviews to ensure compliance with these updated reimbursement standards and the CMS 2024 final rule.

Additionally, the bill allows healthcare providers to request administrative hearings if they experience delays or errors in reimbursement. It also encourages the establishment of incentive payments for providers based on quality of care and access metrics, particularly in rural and underserved areas. The Bureau of TennCare is required to seek necessary modifications to the state Medicaid plan and pursue available funding to support these reimbursement adjustments. An annual report detailing the fiscal impacts and access improvements will be submitted to relevant legislative committees starting February 1, 2026. The act will take effect upon becoming law and applies to all TennCare reimbursements for key services occurring on or after January 1, 2025.