SB 403 - HB 435
FISCAL NOTE
Fiscal Review Committee
Tennessee General Assembly
February 4, 2025
Fiscal Analyst: Chris Higgins | Email: chris.higgins@capitol.tn.gov | Phone: 615-741-2564
SB 403 - HB 435
SUMMARY OF BILL: Requires a facility that accepts public funds as compensation for
losses due to providing uncompensated care to ensure that an amount of outstanding patient debt
equal to the amount of public funds accepted is designated as satisfied. Prohibits the facility from
seeking a judgment or taking other legal action to collect from the debtor any portion of such debt
that is so designated. Requires a facility that accepts such funds to notify the patient whose debt has
been satisfied, including the amount of debt satisfied and instructions for how to pay the remaining
balance of the patient's debt.
Requires the Health Facilities Commission (HFC) to promulgate rules to establish a process for
facilities that accept public funds to use to offset uncompensated care losses to ensure that the
facility maximizes the number of patients with outstanding debt that is designated. Establishes that a
facility that violates the legislation is subject to sanctions by the HFC.
Requires the Department of Health (DOH), in collaboration with the Division of TennCare
(Division), to submit an annual report regarding uncompensated care to the General Assembly no
later than January 15, 2026, and by each January 15 thereafter, including a report on all expenditures
in the previous calendar year for virtual disproportionate share hospital (DSH) payments and for
payments to hospitals for uncompensated care to charity patients.
FISCAL IMPACT:
STATE GOVERNMENT
EXPENDITURES General Fund
FY25-26 & Subsequent Years $109,500
Total Positions Required: 1
Assumptions:
• In order to monitor hospitals' compliance with the requirements of the legislation, the HFC
will require one additional Auditor 4 position beginning in FY25-26.
Title Salary Benefits # Positions Total
Auditor 4 $87,036 $22,467 1 $109,503
SB 403 - HB 435 2
• The Division utilizes two pools to provide supplemental payments to qualifying hospitals to
help offset the costs these facilities incur in providing uncompensated care: the Virtual
DSH pool and the Uncompensated Care Fund for Charity Care (Charity Care pool).
• The Virtual DSH pool has an annual cap of $508,936,029 and the Charity Care pool has an
annual cap of $589,886,294.
• In the first quarter of FY24-25, the Division disbursed a total of $153,312,013 in
uncompensated care payments to 107 hospitals.
• The proposed legislation will require facilities to designate a certain amount of patient debt
as satisfied, but will not impact the amount of expenditures made by the Division to
hospitals for providing uncompensated care.
• The DOH can collaborate with the Division to compile and submit the required reports
utilizing existing personnel and resources, without a significant increase in expenditures.
IMPACT TO COMMERCE:
OTHER COMMERCE IMPACT
Hospitals may experience a decrease in business revenue from lost collections of patients' medical
debts. The extent of such decrease is dependent on a number of unknown factors and cannot be
reasonably determined.
Assumptions:
• To the extent that hospitals will be unable to collect outstanding medical debt as a result the
proposed legislation, business revenue to the hospitals will decrease due to the loss of such
collections.
• It is unknown the amount of medical debt collections that will be foregone as a result of the
proposed legislation.
• Any impact to jobs in the private sector in Tennessee is estimated to be not significant.
CERTIFICATION:
The information contained herein is true and correct to the best of my knowledge.
Bojan Savic, Executive Director