Tennessee lawmakers hear urgent appeals on TennCare reimbursement as rural hospitals and physician supply strain

Chairman Gerald Martin brought House Bill 173 to the Insurance Committee on Wednesday, describing legislation to raise rural hospital reimbursement to a break‑even level set by the U.S. Department of Health and Human Services for hospitals with 49 beds or fewer. The committee voted 14‑0 to send HB173 to Finance, Ways and Means.

Members and a panel of clinicians then discussed House Bill 372, a separate measure sponsored by Chairman Halsey intended to improve access for TennCare enrollees by encouraging higher physician participation through financial changes. After more than an hour of testimony and committee questioning, HB372 also passed the committee 14‑0 and was referred to Government Operations.

Why it matters: Committee members and testifying physicians said low TennCare reimbursement is a principal driver of provider exits, contributing to rural hospital closures, maternity care “deserts” and limited specialty access. Committee members framed the bills as initial steps toward stabilizing rural access and recruiting or retaining clinicians in high‑need areas.

What supporters told the committee

Dr. Jot Hallman,…