SB 231 - HB 296
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
March 6, 2025
Fiscal Analyst: Chris Higgins | Email: chris.higgins@capitol.tn.gov | Phone: 615-741-2564
SB 231 - HB 296
SUMMARY OF BILL: Requires a health benefit plan that provides coverage for habilitative
services to provide coverage for habilitative speech therapy as a treatment for stuttering, regardless
of whether the stuttering is classified as developmental. Requires a health benefit plan that covers
rehabilitative services to provide coverage for rehabilitative speech therapy as a treatment for
stuttering.
Establishes that habilitative and rehabilitative services must not be subject to any maximum annual
benefit limit; not be limited based on the type of disease, injury, disorder, or other medical condition
that resulted in the stuttering; not be subject to utilization review or utilization management
requirements, including prior authorization or a determination that the speech therapy services are
medically necessary; and must include coverage for speech therapy provided in person and via
telehealth.
FISCAL IMPACT:
STATE GOVERNMENT
EXPENDITURES General Fund
FY25-26 & Subsequent Years $3,072,800
FEDERAL GOVERNMENT
EXPENDITURES
FY25-26 & Subsequent Years $1,596,700
LOCAL GOVERNMENT
EXPENDITURES Mandatory
FY25-26 & Subsequent Years $307,800
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.
OTHER FISCAL IMPACT
Potential Impact on Health Insurance Premiums (required by Tenn. Code Ann. § 3-2-111): Such
legislation will result in an increase in the cost of health insurance premiums for procedures and
treatments being provided by plans that do not currently offer these benefits at the proposed
mandated levels. It is estimated that the increase to each individual’s total premium will be less than
one percent.
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Assumptions:
Division of TennCare
• The proposed legislation will expand speech therapy coverage for stuttering under the
TennCare program and the CoverKids program.
• According to the National Institute on Deafness and Other Communication Disorders,
approximately five percent of all children will stutter for some period in their life and about
one percent continue to stutter as adults.
• Based on information provided by the Division of TennCare (Division), it is estimated that
there are potentially 43,025 TennCare enrollees (37,234 children + 5,791 adults) and 1,531
CoverKids enrollees (1,439 children + 92 adults) who have a stuttering disorder.
• According to the Department of Education’s 2024 Annual Statistical Report, there are 30,054
students with a speech/language impaired disability receiving special education services.
• Due to the elimination of medical necessity determinations and the coverage requirements
of the proposed legislation, it is estimated that 15 percent of eligible children and 5 percent
of eligible adults will receive speech therapy services for stuttering.
• The Division's average reimbursement for speech therapy for stuttering in 2023 was $457
per member.
• The total cost to the TennCare program for speech therapy services for stuttering is
estimated to be $2,684,710 {[(37,234 x 15%) + (5,791 x 5%)] x $457]}.
• The total cost to the CoverKids program for speech therapy services for stuttering is
estimated to be $100,756 {[(1,439 x 15%) + (92 x 5%)] x $457]}.
• In 2023, managed care organizations reimbursed a total of approximately $378,816 for
speech therapy for stuttering under the TennCare program, and $15,796 for speech therapy
for stuttering under the CoverKids program.
• These amounts will not be included in new expenditures from the proposed legislation;
therefore, the net impact to the TennCare program is estimated to be $2,305,894
($2,684,710 - $378,816), and the net impact to the CoverKids program is estimated to be
$84,960 ($100,756 - $15,796) in FY25-26 and subsequent years.
• TennCare expenditures receiving matching funds at a rate of 64.323 percent federal to
35.677 percent state. CoverKids expenditures receive matching funds at a rate of 75.025
percent federal to 24.975 percent state.
• The total estimated increase in expenditures to the Division is as follows:
Expenditures State Share Federal Share
TennCare Program $2,305,894 $822,674 $1,483,220
CoverKids Program $84,960 $21,219 $63,741
Total: $843,893 $1,546,961
Division of Benefits Administration
• The proposed legislation will also expand coverage for the health plans under the State
Group Insurance Program (SGIP).
• Based on information provided by the Division of Benefits Administration, increasing
speech therapy coverage and eliminating the use of medical management tools will result in
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an increase in expenditures to the SGIP of approximately $898,421 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 $344,994 ($898,421 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 $49,714 ($344,994 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 $159,357 [($898,421 x
43% x 75% x 45%) + ($898,421 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 $226,964 [($898,421 x 43%) - $159,357)].
• 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 $80,858 ($898,421 x 9%).
• The total increase in state expenditures from the SGIP is estimated to be $454,637
($344,994 - $49,714 + $159,357).
• The total increase in federal expenditures is estimated to be $49,714.
• The total mandatory increase in local expenditures is estimated to be $307,822 ($226,964 +
$80,858).
Commercial Insurance
• According to the Department of Commerce and Insurance (DCI), the proposed legislation
will be considered an additional coverage mandate to the essential health benefits (EHB) of
the qualified health plans (QHPs) offered on and off the Marketplace Exchange.
• The state will be required to defray the cost of benefits to commercial insurers because they
exceed those provided under Tennessee’s EHB benchmark plan.
• As of January 2025, the Centers for Medicare and Medicaid Services (CMS) showed a total
population of 624,867 covered lives on QHPs in Tennessee.
• According to estimates from multiple QHP providers, the increase in costs per member per
month as a result from the proposed draft legislation will be approximately $0.23. This
would result in an increase in state expenditures of $1,774,313 [($0.23 x 642,867) x 12
months] annually in order for DCI to defray the costs of this increase.
Total Impacts
• The total increase in state expenditures will be $3,072,843 ($843,893 + $454,637 +
$1,774,313) in FY25-26 and subsequent years.
• The total increase in federal expenditures will be $1,596,675 ($1,546,961 + $49,714) in
FY25-26 and subsequent years.
• The total increase in mandatory local expenditures will be $307,822 in FY25-26 and
subsequent years.
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• Potential Impact on Health Insurance Premiums (required by Tenn. Code Ann. § 3-2-111):
Such legislation will result in an increase in the cost of health insurance premiums for
procedures and treatments being provided by plans that do not currently offer these
benefits at the proposed mandated levels. It is estimated that the increase to each
individual’s total premium will be less than one percent.
IMPACT TO COMMERCE:
BUSINESS IMPACT
FISCAL YEAR REVENUE EXPENSES
FY25-26 & Subsequent Years $4,977,300 <$4,977,300
Assumptions:
• Speech therapy providers will experience an increase in business revenue of approximately
$4,977,340 ($3,072,843 + $1,596,675 + $307,822) in FY25-26 and subsequent years for
providing treatment for stuttering.
• For business to remain solvent, any increase in expenditures for providing services is
expected to be less than the amount of revenue collected.
• It is unknown if increased speech therapy utilization will result in providers hiring additional
speech therapists in the state.
CERTIFICATION:
The information contained herein is true and correct to the best of my knowledge.
Bojan Savic, Executive Director