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TennCare leaders say providers have received billions in increased payments; hospital and nursing home rates to be adjusted by 2028
Summary
TennCare Director Steven Smith told the committee the state has reinvested shared-savings dollars and made "more than $5,000,000,000 in additional combined state, federal, and assessment funding" for providers, including over $4 billion for hospitals and $700 million for nursing homes. He warned directed payments will be reduced starting in 2028 toward 110% of Medicare.
During the Commerce and Labor hearing, TennCare Director Steven Smith outlined significant provider investments made using shared-savings and other funds. "More than $5,000,000,000 in additional combined state, federal, and assessment funding to providers," Smith said, specifying "more than $4,000,000,000 for hospitals" and "$700,000,000 for nursing homes." He framed the investments as part of a multi‑year recovery and stability effort for providers and for the Medicaid program.
Smith told the committee directed payments linked to provider assessments will have to be reduced beginning in 2028 — by roughly 10% per year until those payments reach about 110% of Medicare rates — though he said precise dollar impacts depend on future Medicare changes and are difficult to estimate. Committee members asked whether those changes would affect ambulance payments and nonemergency reimbursements; Smith said nonemergency ambulance payments would not be impacted but that some directed payments currently exceed 110% and will be reduced.
CFO Zain Sills added that TennCare's core medical inflation and utilization growth has run at about one-half the national average and that agency efforts around fraud, waste and abuse have produced recurring reductions and cumulative savings.
