Senate Bill 1939, known as the "Annual Coverage Assessment Act of 2026," amends Tennessee law to establish a six percent annual coverage assessment for covered hospitals, calculated based on their net patient revenue minus Medicare net revenue. The bill introduces provisions for more frequent reporting by the division to enhance oversight and accountability, and it outlines specific criteria for hospitals without a full twelve-month Medicare cost report for 2021. Additionally, the assessment's validity is contingent upon written notice to the Tennessee Hospital Association and approval from the Centers for Medicare and Medicaid Services (CMS). The bill also prohibits managed care organizations from reducing rates based on the assessment and details the classification of hospitals for fair financial responsibility distribution.

The generated funds from the coverage assessment will be deposited into a maintenance of coverage trust fund, designated for specific healthcare expenditures, including hospital reimbursement rates and uncompensated care. The division is tasked with modifying contracts with managed care organizations and is required to submit requests to CMS for necessary Medicaid state plan modifications. Starting September 1, 2026, the division must provide quarterly reports to legislative committees on the trust fund's status and usage. The bill also includes provisions for audits of fund expenditures and deletes Section 71-5-161 from the Tennessee Code Annotated, with the act set to take effect on July 1, 2026.

Statutes affected:
Introduced: 71-5-2005(g), 71-5-2005
Amended with HA0698 -- 04/06/2026: 71-5-2005(g), 71-5-2005, 71-5-161