(a) In developing or implementing any payment reform initiative involving the use of episodes of care with respect to medical assistance provided under this chapter by the bureau of TennCare or the health care finance and administration (HCFA) of the department of finance and administration, the bureau and HCFA shall report on the use of technical assistance groups of healthcare providers in developing any episode of care. The reports shall include all recommendations made by technical assistance groups throughout the period of implementation of any episode of care. In addition to any other information required in the quarterly report to the general assembly pursuant to § 71-5-104(c), the bureau of TennCare shall summarize in quarterly reports the recommendations of any technical assistance group concerning the payment reform initiative and identify any action taken by the bureau or HCFA to address those recommendations. The bureau and HCFA shall report to the health and welfare committee of the senate, the health committee of the house of representatives, and the committee of the house of representatives having oversight over TennCare by July 1 each year, beginning in 2016, specifically concerning the use of technical assistance groups, on each recommendation made by those groups, and the response by the bureau or HCFA to each recommendation. This section shall apply to any payment reform initiative utilizing episodes of care, including any initiative receiving a state innovation model initiative grant from the federal centers for medicare and medicaid services.

(b) In developing or implementing any payment reform initiative involving the use of episodes of care with respect to medical assistance provided under this chapter by the bureau of TennCare or the HCFA of the department of finance and administration, the bureau and HCFA shall not impose a fine or penalty on any provider. The bureau and HCFA may impose withholds in order to recover some portion of costs that exceeds a cost threshold for an episode developed by the initiative. A withhold may not be called a fine or a penalty.

(c)

(1) The bureau of TennCare and the HCFA shall study the means of fair and just implementation of the episodes of care initiatives, especially with respect to costs associated with:

(A) A healthcare facility located in an area that lacks an alternative healthcare facility within a thirty-minute drive;

(B) Lack of more than a single provider of healthcare services for, including, but not limited to, radiology, anesthesia, pathology, or physical therapy; and

(C) Contractual arrangements between the bureau of TennCare, managed care organizations, and other participating providers or healthcare facilities associated with the particular episode of care if such contracts are the cause of increased costs.

(2) No later than January 31, 2019, the bureau of TennCare and HCFA shall report the results of the study conducted pursuant to this subsection (c) to the health and welfare committee of the senate, the health committee of the house of representatives, and the committee of the house of representatives having oversight over TennCare.

(d)

(1) In developing or implementing any payment reform initiative involving the use of episodes of care with respect to medical assistance provided under this chapter by the bureau of TennCare, a healthcare provider shall not be required to pay the portion of the risk sharing payment that is attributable to the increased cost of pain relief services if the following conditions are met:

(A) The healthcare provider is required to make an episodes of care risk-sharing payment to a managed care organization;

(B) Some portion of the episode costs were due to pain relief services;

(C) The pain relief services provided to the patient were more expensive than an alternative pain relief service; and

(D) The provider can demonstrate that the pain relief services provided to the patient had the effect of reducing opioid use by the patient relative to an alternative pain relief service routinely used by other providers in the episode.

(2) The bureau of TennCare is authorized to promulgate rules, pursuant to the Uniform Administrative Procedures Act, compiled in title 4, chapter 5, as may be necessary to implement this section.

(e) On and after July 1, 2018, in developing or implementing any payment reform initiative involving the use of episodes of care with respect to medical assistance provided under this chapter by the bureau of TennCare or the HCFA of the department of finance and administration, the bureau and the HCFA shall exclude anxiety episodes and non-emergent depression episodes from the initiative. This subsection (e) shall apply to any initiative receiving a state innovation model initiative grant from the federal centers for medicare and medicaid services.