Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Provider Incentives topic
No spam. Unsubscribe anytime.
Bill proposing charitable tax incentive for providers who accept TennCare patients advances amid IRS uncertainty
Summary
House Bill 385, which would allow charitable donations to medical providers to cover the difference between Medicaid and TennCare reimbursement, advanced to full Insurance. Sponsor said the measure awaits a federal IRS determination that would allow the tax mechanism to work; the committee voted to advance while implementation questions remain.
House Bill 385, introduced by Representative Butler, advanced out of the TennCare Subcommittee to full Insurance on a 7-0 vote after members discussed a targeted tax incentive designed to encourage more providers to accept TennCare patients.
The bill would create a mechanism by which a charitable donation could be made to a provider for some or all of the gap between a Medicaid-equivalent rate and the actual TennCare payment. Representative Butler told members the idea began after a constituent had difficulty finding a dentist who would accept TennCare. He said the measure would allow a donation that equals the difference between a higher Medicaid reimbursement benchmark and a lower TennCare-paid amount so that providers receive additional compensation as a charitable contribution that could be deductible on federal returns.
Representative Butler said the legislation’s progress depends on a letter from the Internal Revenue Service that would confirm whether the proposed tax treatment is allowable; he said the request was sent in September by federal representatives and the subcommittee would pause further action if the IRS response were negative. The sponsor also said the mechanics would require averaging or standardizing rates because MCO-negotiated rates vary by provider. He cited state figures during the hearing: approximately 1,600,000 TennCare enrollees and roughly 70,000 providers statewide.
Members asked about contract terms with TennCare and how a donation approach would interact with negotiated provider rates; the sponsor said the details would be worked out with TennCare if IRS guidance permits the approach. The subcommittee voted 7-0 to advance the bill to full Insurance, with the sponsor noting that if IRS guidance does not arrive in time the measure would not proceed further this session.
Ending: The bill will proceed to full Insurance but implementation depends on federal IRS guidance and subsequent operational work with TennCare and MCOs.
