HB 29 - SB 225
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
February 24, 2025
Fiscal Analyst: Chris Higgins | Email: chris.higgins@capitol.tn.gov | Phone: 615-741-2564
HB 29 - SB 225
SUMMARY OF BILL: Prohibits a health insurance entity from discriminating between a
chiropractic physician and a medical physician with respect to the methodology used to calculate
reimbursement or the amount of reimbursement to be paid for a service that is in the lawful scope
of practice of a duly licensed chiropractic physician. Prohibits a health insurance entity from
attempting to circumvent such prohibition by creating a chiropractic specific code or payment
methodology not listed in the nationally recognized code book used by the health insurance entity
for determining the amount of reimbursement.
FISCAL IMPACT:
STATE GOVERNMENT
EXPENDITURES General Fund
FY25-26 & Subsequent Years $2,777,800
FEDERAL GOVERNMENT
EXPENDITURES
FY25-26 & Subsequent Years $303,700
LOCAL GOVERNMENT
EXPENDITURES Mandatory
FY25-26 & Subsequent Years $1,880,800
Article II, Section 24 of the Tennessee Constitution provides that: no law of general application shall impose increased expenditure
requirements on cities or counties unless the General Assembly shall provide that the state share in the cost.
Assumptions:
• The proposed legislation does not apply to services provided under the TennCare program
or the CoverKids program.
• The Department of Commerce and Insurance can monitor compliance with the legislation
utilizing existing personnel and resources.
• The proposed legislation does not apply to insurance coverage provided by the state or
local governments of the state. However, the State Group Insurance Program (SGIP)
contracts with private medical carriers to access their commercial networks, which includes
the rates negotiated with their providers.
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• It is not possible for the private carriers to carve out a separate payment methodology for
the SGIP.
• The medical carriers employed by the SGIP utilize different methodologies to calculate
reimbursement for chiropractic services. One carrier currently utilizes a flat rate for visits to
chiropractic offices, which would not be permissible under the proposed legislation.
• Based on information provided by the Division of Benefits Administration, changing the
payment methodology for services rendered by a chiropractic physician to be the same as a
medical physician will result in an increase in expenditures to the SGIP of approximately
$5,489,286 in FY25-26 and subsequent years.
• It is estimated that 48 percent of members are on the State Employee Plan, 43 percent are
on the Local Education Plan and 9 percent are on the Local Government Plan.
• The state contributes 80 percent of member premiums resulting in a recurring increase in
state expenditures of $2,107,886 ($5,489,286 x 48% x 80%).
• Some state plan members' insurance premiums are funded through federal dollars. It is
estimated 14.41 percent of the state share of the state plan is funded with federal dollars,
resulting in an increase in federal expenditures of $303,746 ($2,107,886 x 14.41%).
• The state contributes 45 percent of instructional member premiums (75 percent of Local
Education Plan members) and 30 percent of support staff member premiums (25 percent
of Local Education Plan members) resulting in state expenditures of $973,662 [($5,489,286
x 43% x 75% x 45%) + ($5,489,286 x 43% x 25% x 30%)].
• The mandatory increase in expenditures for the local government share of the Local
Education Plan is estimated to be $1,386,731 [($5,489,286 x 43%) - $973,662)].
• The state does not contribute to the Local Government Plan. It is estimated the Local
Government Plan would be responsible for a mandatory increase in local expenditures
estimated to be $494,036 ($5,489,286 x 9%).
• The total increase in state expenditures is estimated to be $2,777,801 ($2,107,886 - $303,746
+ $973,662) in FY25-26 and subsequent years.
• The total increase in federal expenditures is estimated to be $303,746 in FY25-26 and
subsequent years.
• The total mandatory increase in local expenditures is estimated to be $1,880,767 ($1,386,731
+ $494,036) in FY25-26 and subsequent years.
IMPACT TO COMMERCE:
BUSINESS IMPACT
FISCAL YEAR REVENUE
FY25-26 & Subsequent Years $5,489,300
Assumptions:
• Chiropractic physicians will experience an increase in business revenue of $5,489,286 in
FY25-26 and subsequent years from increasing reimbursement rates.
• The proposed legislation will not increase the number of chiropractic practitioners in the
state; therefore, any impact to jobs is estimated to be not significant.
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CERTIFICATION:
The information contained herein is true and correct to the best of my knowledge.
Bojan Savic, Executive Director