(a) There is established in the department of finance and administration a TennCare advisory commission. The advisory commission will be separate and distinct from the bureau of TennCare but will be allowed access to all data concerning the operations, management, and program functions of the TennCare program, including information relevant to the TennCare program held or maintained by other state agencies. In accordance with 45 CFR 160.101 et seq., members of the advisory commission will provide nonpaid consulting services to the bureau of TennCare and may have access to protected health information to the extent necessary to perform their advisory function.

(b) The advisory commission shall be appointed by the governor and will be composed of thirteen (13) members who should reflect the broad impact that the TennCare program has on this state. The membership of the advisory commission shall include one (1) representative of the advocacy community; the chair of the health committee of the house of representatives, or the chair's designee; the chair of the health and welfare committee of the senate, or the chair's designee; two (2) representatives from the Tennessee business community; and three (3) representatives from the provider community. In addition, the membership of the advisory commission shall include one (1) person chosen by the governor from a list of three (3) persons nominated by the speaker of the house of representatives, and one (1) person chosen by the governor from a list of three (3) persons nominated by the speaker of the senate. If the governor does not choose a commissioner member from the initial list of three (3) persons nominated by each speaker, the appropriate speaker shall submit another list of three (3) persons for the governor's consideration. In making the appointments, the governor shall strive to ensure that the advisory commission's membership is representative of the state's geographic and demographic composition with appropriate attention to the representation of women and minorities. In making the initial appointments, the governor will designate three (3) initial appointees to serve until December 31, 2005, four (4) initial appointees to serve until December 31, 2006, and four (4) initial appointees to serve until December 31, 2007. Except for initial appointments, members shall be appointed to three-year terms. At the time of the initial appointments of the advisory commission, the governor shall appoint a chair and vice-chair of the commission from the membership of the commission who shall serve until December 31, 2005. The governor shall thereafter appoint a chair and vice-chair to one-year terms from the membership of the commission.

(c) The purpose of the commission is to review annually the health care operations including, but not limited to, cost-management analysis, benefits, enrollment, eligibility, costs, and performance of the TennCare program and to make recommendations to the governor regarding cost-containment strategies and cost-effective program improvements. Such recommendations by the commission will include an assessment of the effectiveness of the existing TennCare program, specific steps that could be taken to reduce program costs, and an evaluation of whether the program is optimizing its use of resources to best meet the needs of TennCare enrollees. Proposed modifications submitted by the commission that may result in increased program expenditures should be accompanied by recommendations to achieve commensurate savings in other program areas in order to achieve overall management of program costs. The commission shall present its recommendations in writing to the governor no later than November 10 of each year.

(d) Subject to an appropriation set forth in the general appropriations act, the commission will have the power to engage expert assistance in accordance with the state procurement processes. The department of finance and administration will provide the commission with appropriate staff and assistance.

(e) Members of the advisory commission shall maintain strict standards of confidentiality in the handling of all matters before the commission in accordance with federal and state law. All material and information, regardless of form, medium, or method of communication, provided to or acquired by a member or the commission staff in the course of the commission's work, shall be regarded as confidential information and shall not be disclosed and are deemed not to be a public record. In addition, all material and information, regardless of form, medium, or method of communication, made or generated by a member or the commission staff in the course of the commission's work, shall be regarded as confidential information and shall not be disclosed and are not public records. All necessary steps shall be taken by members and staff to safeguard the confidentiality of such material or information in conformance with federal and state law.

(f) Items or matters discussed by the commission may from time to time present real or apparent conflicts for members of the commission. Due to the importance of the commission's work and the advisory nature of its recommendations, in the event that a matter being considered by the commission presents a real or apparent conflict of interest, the affected member of the commission shall disclose the conflict to the chair but shall be allowed to discuss and take official action on the particular matter. The professional backgrounds of each member of the advisory commission as well as any conflicts disclosed by a member to the chair during a given year shall be reported in the commission's recommendations as set forth in subsection (c) of this section.

(g) Members shall receive no compensation for their services on the commission but may be reimbursed for those expenses allowed by the comprehensive travel regulations promulgated by the department of finance and administration and approved by the attorney general and reporter.