Tenn. Code Ann. § 71-5-105 (2026)

• (a) The department shall:
  • (1) Supervise the administration of medical assistance for eligible recipients;
  • (2) Make uniform rules and regulations, not inconsistent with the law, for implementing, administering and enforcing this part in an efficient, economical and impartial manner;
  • (3)
    • (A) Establish, in consultation with the comptroller of the treasury, rules and regulations for the determination of payment for hospitals, and other health care providers who contract with the department for the care of persons eligible for assistance pursuant to this part;
    • (B) Establish, in consultation with the comptroller of the treasury and the Tennessee Health Care Association (THCA), rules for an acuity and quality-based reimbursement methodology for nursing facility services paid for by the bureau of TennCare under the rules of the department and as designated and certified by the department. Payment determination components shall include acuity adjusted direct care, non-acuity adjusted direct care, quality, administration, fair market value capital, a cost-based component, and an inflation index factor. The inflation index factor that shall be the most recent Skilled Nursing Facility without Capital Market Basket Index as published by IHS Global Insight (IHS Economics) or other index as may be agreed to by the bureau of TennCare and the comptroller of the treasury, in consultation with THCA, should this index cease to be produced. The commissioner may establish the maximum amount to be paid to nursing facilities, consistent with the requirements of federal law and § 71-5-124(b);
  • (4) Cooperate with the appropriate federal department in any reasonable manner as may be necessary to qualify for federal aid in connection with the medical assistance program;
  • (5) Within sixty (60) days after the close of each fiscal year, prepare and print an annual report, which shall be submitted to the governor and members of the general assembly. This report shall include a full account of the operations and the expenditures of all funds under this part, adequate and complete statistics divided by counties about all medical assistance within the state, rules and regulations of the department promulgated to carry out this part, and such other information as it may deem advisable;
  • (6) Prepare or have prepared and release a summary statement monthly showing by counties the amount paid under this part and the total number of persons assisted;
  • (7) Establish and enforce safeguards to prevent unauthorized disclosures or improper use of the information contained in applications, reports of investigations and medical examinations, and correspondence in the individual case records of recipients of medical assistance;
  • (8) Furnish information to acquaint needy persons and the public generally with the plan for medical assistance of this state;
  • (9) Cooperate with agencies in other states in establishing reciprocal agreements to provide for payment of medical assistance to recipients who have moved to another state, consistent with this part and of Title XIX as amended;
  • (10) Contract, to the extent feasible, with one (1) or more contractors or fiscal intermediaries, or both, to provide or arrange services under this part. All such contracts shall be procured in accordance with the requirements of title 12, chapter 4, part 1; provided, that the department shall be required to solicit competitive proposals for contracts with fiscal intermediaries;
  • (11) Increase the coverage under medicaid for inpatient hospital days from fourteen (14) days to twenty (20) days, as provided for in the public health regulations of the United States department of health and human services, health care financing administration (HCFA). Coverage for inpatient hospital days shall be unlimited for any infant under the age of one (1) year to the extent required by federal law or regulations. The commissioner is further directed to promulgate a rule establishing a system of prospective reimbursement, targeted reimbursement, diagnosis-related groups, other method of reimbursement related to diagnosis, or other method of reimbursement pursuant to any federal waiver that waives any or all of the provisions of Title XIX that the state may receive or pursuant to any other federal law as adopted by amendment to the required Title XIX state plan, at which time such mechanism shall be used to determine the number of inpatient hospital days instead of the twenty-day limitation provided in this subdivision (a)(11); and
  • (12) Notwithstanding any law to the contrary, assist the council on children's mental health care in developing a plan that will establish demonstration sites in certain geographic areas where children's mental health care is child-centered, family-driven, and culturally and linguistically competent and that provides a coordinated system of care for children's mental health needs in this state.

• (b)
  • (1) Subject to subdivision (b)(3), the total number of beds in private for-profit and private not-for-profit intermediate care facilities for individuals with intellectual disabilities (ICF/IID) must not be less than six hundred ninety-six (696) absent a reduction in the occupancy rate to eighty percent (80%) or less of the statewide available occupancy as determined annually and must not exceed a total maximum number of eight hundred four (804) upon the voluntary surrender by the certificate of need providers. To determine the statewide available occupancy, the department of disability and aging shall use the data from cost reports submitted by providers to the comptroller of the treasury. The department shall demonstrate a commitment to assisting providers who chose to transition a current site from ICF/IID services to home and community-based services (HCBS) in achieving compliance with the HCBS settings rules. In compliance with the certificate of need process, private for-profit and private not-for-profit ICF/IID beds may be transferred from one (1) location or one (1) provider to another, but the total number of such beds must not exceed eight hundred four (804).
  • (2) An available private ICF/IID bed may be filled only upon completion of a community-informed choice process established and administered by the department of disability and aging that fairly and completely represents available options in order to ensure that the placement is the most integrated and cost-effective setting and subject to the individual's freedom of choice. Providers may refuse persons based on needs compatibility considering the total mix of persons in the facility. The department of disability and aging shall demonstrate a commitment to ensuring the individual's freedom of choice and ensure that each eligible service recipient is fully informed of all services available to the recipient, including community ICF/IID facilities and the specialized services the facilities provide.
  • (3) The total number of private for-profit and not-for-profit ICF/IID beds authorized in subdivision (b)(1) is permanently reduced upon voluntary surrender of a certificate of need for the specified number of ICF/IID beds by the owner. A surrendered bed must not be reestablished by the same or another owner.

• (c) Notwithstanding any authority to the contrary, DIDD public ICF/MR non-facility beds established pursuant to federal litigation settlements or orders arising out of the cases United States v. State of Tennessee, 798 F. Supp. 483; 1992 U.S. Dist. LEXIS 14004 (W.D. Tenn. 1992), or People First of Tennessee, et al., v. Clover Bottom Developmental Center, et al., NO. 00-5342 (Docket) (C.A.6 Mar. 22, 2000), shall be exempt from all requirements and processes for the application and granting of certificates of need as set forth in § 68-11-1607. The establishment of all private ICF/MR non-facility beds remains subject to certificate of need requirements and processes.

Amended by 2024 Tenn. Acts, ch. 688,s 181, eff. 7/1/2024.

Amended by 2023 Tenn. Acts, ch. 254, s 1, eff. 4/28/2023.

Amended by 2018 Tenn. Acts, ch. 836, s 1, eff. 7/1/2018.

Amended by 2016 Tenn. Acts, ch. 630, s 1, eff. 3/23/2016.

Amended by 2013 Tenn. Acts, ch. 239, s 1, eff. 7/1/2013.

Acts 1968, ch. 551, § 5; T.C.A., § 14-1905; Acts 1982, ch. 730, § 5; 1984, ch. 787, § 9; 1986, ch. 831, § 1; 1986, ch. 884, § 1; T.C.A., § 14-23-105; Acts 1989, ch. 45, § 1; 1989, ch. 296, § 1; 1992, ch. 903, § 1; 1993, ch. 358, § 4; 1997 , ch. 478, § 3; 2006, ch. 761, § 1; 2007 , ch. 307, § 1; 2008 , ch. 1062, § 11; 2008 , ch. 1190, § 19; 2009 , ch. 458, § 1; 2009 , ch. 477, § 1; 2010 , ch. 1100, § 139.