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Committee advances Save the Rural Hospital Act to health committee, sponsor says it will align TennCare rates
Summary
Senate Bill 185, the Save the Rural Hospital Act, advanced from Commerce and Labor to the Health Committee. The sponsor said the bill updates TennCare inpatient payment rates, providing the first increase in about 18 years for rural hospitals.
Senate Bill 185, described by its sponsor as the Save the Rural Hospital Act, advanced out of the Commerce and Labor Committee to the Health Committee on March 11, 2025.
Sponsor summary: The sponsor said the bill seeks to strengthen rural hospitals by updating TennCare inpatient reimbursement rates so they better reflect current costs. “Rural hospitals have not seen an adjustment in their TennCare rates since 02/2006,” the sponsor said, adding the bill would provide the first inpatient-rate increase in about 18 years and align payments closer to cost and federal guidance from the U.S. Department of Health and Human Services.
Rationale and context: Sponsor testimony emphasized rural economic impacts of hospital closures and described rural hospital closures as both a health-care and economic crisis in affected counties. The sponsor cited his district and other medically vulnerable counties as examples where updated rates could sustain operations, staffing and local economic development.
Outcome: The committee voted to move SB 185 to the Health Committee; the clerk recorded seven ayes. No committee amendments were adopted at this hearing.
Next steps: SB 185 will be considered next by the Senate Health Committee, where the bill’s reimbursement methodology and fiscal impact figures will be examined in more detail.
