TN HB1864

Delays implementation of certain Medicaid nursing facility reimbursement provisions by one year, from FY 2025-2026 to FY 2026-2027, with an effective date of July 1, 2026

Requires rebasing of Medicaid nursing facility cost components at intervals no longer than three years, using the most recently audited cost reports to establish median costs and prices

Establishes a Budget Adjustment Factor (BAF) that TennCare must calculate annually during non-rebase years to align expected nursing facility expenditures with the program's budget target, applied as an across-the-board percentage adjustment to all provider rates

Prohibits TennCare from applying the BAF or other computations that alter median cost calculations when establishing a new base year period

Requires TennCare to notify legislative health committee chairs by March 1 before making any pro rata payment reductions, with rules to be developed in consultation with the comptroller and Tennessee Health Care Association by December 31, 2026