SB 1797

Present law requires a managed care organization ("MCO"") to contract with any nursing home that is licensed in this state and is certified by the bureau of TennCare (""bureau"") to provide medicaid nursing facility services pursuant to an approved preadmis sion evaluation (""qualified nursing facility"") to provide such services under the same terms and conditions as are offered by any other participating facility contracted with that MCO to provide the same service under any policy, contract, or plan that is p art of the TennCare managed long-term care service delivery system. As used in present law, a ""managed care organization"" means a health maintenance organization, behavioral health organization, or managed health insurance issuer that has a contract with the bureau and participates in the TennCare program. This bill prohibits an MCO from adopting any participation requirements, network admission criteria, or termination standards for a qualified nursing facility beyond those established by the bureau. However, the MCO may enforce other contractual provisi ons that do not affect the facility's participation status. This bill gives the bureau the exclusive authority to determine whether a qualified nursing facility may be terminated from participation in the TennCare program, including the termination of a qualified nursing facility's contract with an MCO. An MCO i s generally prohibited from suspending, denying, refusing to review, terminating, or otherwise taking any action resulting in the actual or constructive termination of a qualified nursing facility contract. However, this does not apply if (i) the bureau ha s taken a final action to terminate the facility's Medicaid provider agreement, (ii) the bureau has authorized termination of the specific contract by written directive to the MCO, (iii) the bureau has suspended payment to a provider on account of a pendi ng investigation into fraud or abuse, or (iv) the qualified nursing facility has been excluded from the medicare or medicaid program. This bill prohibits an MCO from including a provision in the MCO's contract with a qualified nursing facility that permits actual or constructive termination of the contract by the MCO without cause, for convenience, or without specifying the grounds for termination. Any contractual provision that grants an MCO the authority to terminate a provider contract independent of an action by the bureau is void and unenforceable. The bureau must review and approve all MCO standard contract templates for facili ty contracting. If an MCO identifies concerns with a qualified nursing facility's performance, compliance, or quality of care, then this bill requires the MCO to (i) report the concerns to the bureau with supporting documentation, (ii) continue the provider contract whi le the bureau review the allegation and makes a determination, and (iii) cooperate with any corrective action plan established by the bureau. During any review by the bureau, the MCO must honor the provider contract and allow a medicaid beneficiaries to co ntinue to receive services in the qualified nursing facility. Further, the MCO must continue to process and pay claims for services to the qualified nursing facility in accordance with the terms of the contract. This bill clarifies that its provisions do not prevent the bureau from enforcing its provider agreement with a qualified nursing facility or from adopting reasonable and necessary requirements for participation in the TennCare program. Further, this bil l does not limit or expand the authority of the bureau to terminate a qualified nursing facility medicaid provider agreement under state or federal authority. This bill also does not limit or expand the right of a qualified nursing facility to contest su ch actions under state or federal law. APPLICABILITY This bill applies to policies, plans, and contracts entered into, renewed, amended, or delivered on or after July 1, 2026."