Sponsors (7)
The bill restores and inflation‑indexes Tennessee's hospital DSH funding to support care for low‑income patients, but it raises federal Medicaid spending and saddles Tennessee with a 'low DSH State' designation that could limit future flexibility.
Hospitals in Tennessee and the low‑income and uninsured patients they serve will receive restored DSH (disproportionate share hospital) payments beginning FY2026, providing more stable funding for safety‑net care.
Tennessee's DSH allotment will be indexed to annual CPI‑U increases, so the state's allotment keeps pace with inflation and preserves purchasing power for hospital payments over time.
Federal Medicaid spending for Tennessee will rise, increasing federal outlays and potentially requiring budget offsets or higher federal fiscal burdens.
Designating Tennessee a 'low DSH State' may reduce state and hospital flexibility in how DSH funds are allocated and could constrain future adjustments compared with other DSH formulas.
Based on analysis of 2 sections of legislative text.
Establishes a permanent, inflation-indexed Medicaid DSH allotment for Tennessee starting in FY2026 and treats Tennessee as a low-DSH State for future increases.
Creates a permanent Medicaid Disproportionate Share Hospital (DSH) allotment for the State of Tennessee beginning in fiscal year (FY) 2026. Tennessee's FY2026 allotment is set equal to its prior historic DSH level (the FY2015 allotment referenced in current law) and is increased each subsequent year by the CPI-U; Tennessee is treated as a "low DSH" State for future annual increases.
Introduced December 3, 2025 by Diana Harshbarger · Last progress December 3, 2025