TennCare Receives Federal Approval for Hospital Assessment Fee

NASHVILLE - TennCare announced today that federal officials have approved Tennessee’s proposal to draw federal matching dollars in association with a new hospital assessment fee. As a result, TennCare will avoid benefit changes for enrollees and reductions in provider reimbursement rates that would have otherwise been required this year. The assessment fee was approved by the General Assembly in May.

“The approval of the hospital assessment fee provides the Bureau with the financial resources to continue providing needed benefits to our enrollees,” said TennCare Director Darin Gordon. “I am pleased that the Centers for Medicare and Medicaid Services (CMS) acted quickly to approve Tennessee’s request, which allows us to implement a fiscally sound budget plan, and supports the continued financial stability of our program. This fee will generate revenue that enables the state to avoid a series of difficult TennCare reductions that would otherwise have been necessary.”

The creation of the hospital assessment fee was a collaborative effort among several stakeholder groups, including health care-related professional organizations, providers, state officials and members of the General Assembly. Under the arrangement, private hospitals will pay a 3.52 percent fee on their annual coverage assessment base that will be matched by federal dollars. These funds will allow the state to maintain enrollee benefits at current levels and avoid across the board provider rate reductions during the FY 2010-2011 budget year.

With this approval, Tennessee joins more than 25 other states that have similar plans in place.