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SB 1797

Managed Care Organizations - As introduced, prohibits a managed care organization from suspending, denying, refusing to review, terminating, or otherwise taking action resulting in the actual or constructive termination of a qualified nursing facility contract except under certain listed circumstances; specifies that the bureau of TennCare has the exclusive authority to determine whether a qualified nursing facility may be terminated from participating in the TennCare program and makes other related changes. - Amends TCA Title 56; Title 68, Chapter 11 and Title 71, Chapter 5.

114th Regular Session (2025-2026)

Bill centralizes nursing facility termination authority exclusively with TennCare, restricting managed care organizations' ability to terminate contracts without state approval, protecting facility participation but potentially limiting MCO oversight.

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Bill Summary · SB 1797

Legislative bill overview

SB 1797 restricts managed care organizations (MCOs) from terminating nursing facility contracts with TennCare except under specific circumstances. The bill centralizes authority for nursing facility termination decisions exclusively with Tennessee's TennCare bureau rather than allowing MCOs unilateral termination power. This represents a significant shift in regulatory control over healthcare network participation.

Why is this important

Nursing facilities depend on TennCare contracts for patient revenue and business stability. Allowing MCOs unchecked termination power could destabilize facilities serving Medicaid populations. Conversely, restricting MCO termination authority could limit their ability to manage network quality or respond to performance issues, potentially affecting care standards and program costs.

Potential points of contention

  • Regulatory authority conflict: Creates tension between MCO contract autonomy and state oversight; unclear how disputes between MCOs and TennCare over termination grounds will be resolved
  • Quality assurance mechanisms: Restricting MCO termination power may reduce their leverage to enforce quality standards, compliance, or financial performance with nursing facilities
  • Provider protections vs. program efficiency: While protecting facility stability, the bill may insulate underperforming providers from accountability and increase program administrative burden on TennCare bureau

Compiled from official sources — confirm details with the bill’s official record.

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