HR6393-119

What This Bill Does

The DSH in Tennessee Act amends Social Security Act section 1923(f)(3) to give Tennessee a Medicaid disproportionate share hospital allotment starting in fiscal year 2026. For FY2026, the allotment equals the Tennessee FY2015 DSH amount that was tied to the TennCare Demonstration under existing law, increased in each succeeding fiscal year by the percentage change in the consumer price index for all urban consumers. For fiscal years after 2026, Tennessee is deemed a low DSH State, which means its allotment growth follows the low-DSH-state formula. The bill is targeted: it does not redesign Medicaid DSH generally, but it gives Tennessee a continuing statutory allotment path.

Who Benefits and How

Tennessee hospitals serving Medicaid, uninsured, and low-income patients benefit because the State receives a recurring DSH allotment pathway rather than relying only on older TennCare demonstration treatment. TennCare benefits from a clearer federal allotment formula. Low-income and uninsured patients benefit indirectly if hospitals serving them receive more stable DSH support. Tennessee budget officials benefit from a predictable CPI-U-adjusted federal allotment baseline.

Who Bears the Burden and How

CMS Medicaid DSH administrators must apply the Tennessee-specific allotment rule and low-DSH-state treatment after 2026. Federal taxpayers bear the cost of the additional or continuing federal DSH payments. Other States may view the Tennessee-specific formula as a precedent or as preferential treatment in national DSH allocation politics.

Key Provisions

• Amends Social Security Act section 1923(f)(3) to add a Tennessee DSH allotment.
• Provides the FY2026 amount by reference to Tennessee FY2015 DSH under the TennCare Demonstration provision.
• Extends the allotment into succeeding fiscal years by applying CPI-U increases.
• Requires Tennessee to be treated as a low DSH State after fiscal year 2026 for allotment growth purposes.