(a) This section continues the hospital payment rate corridors applicable to payments by managed care organizations to hospitals for services provided to TennCare enrollees established by § 71-5-703(b)(3), as enacted by Chapter 276 of the Public Acts of 2015.

(b) Hospital payment rate variation corridors shall be established by the state's actuary and approved by the bureau of TennCare for payments by managed care organizations to hospitals for services provided to TennCare enrollees as follows:

(1) As required by § 71-5-703(b)(3), as enacted by Chapter 276 of the Public Acts of 2015, the bureau shall implement provisions in its contractor risk agreements (CRAs) with all managed care organizations requiring payment rates for each hospital in the aggregate from all managed care organizations with which the hospital has network contracts to be no less than the minimum levels or more than the maximum levels set forth in subsections (c) and (d); and

(2) Compliance with these standards shall be determined on the basis of the totality of all rates for the hospital by all managed care organizations in the aggregate with which it has a network contract, rather than on the basis of rates for a hospital under a network contract with an individual managed care organization. Managed care organizations shall not enter into or maintain a single case agreement or contract with any hospital that authorizes or requires rates for the hospital that do not conform to the hospital payment variability standards set forth in this section.

(c) The minimum and maximum levels for aggregate rates to hospitals for services to TennCare enrollees shall be based on the percentages of each hospital's federal fiscal year (FFY) 2011 medicare reimbursement set forth in subsection (d). Compliance with these minimum and maximum payment rates shall be determined on the basis of the totality of payments to a hospital for services to TennCare enrollees from all managed care organizations with which the hospital has a network contract. The variation corridors established by this subsection (c) are for the purpose of limiting the amount of variation in the rates paid by TennCare managed care organizations to hospitals, and this subsection (c) shall not create a right by a hospital to receive any actual amount of reimbursement in the aggregate from all TennCare managed care organizations.

(d)

(1) For routine, nonspecialized inpatient services, the minimum level is fifty-three and eight-tenths percent (53.8%), and the maximum level is eighty percent (80%);

(2) For outpatient services, the minimum level is ninety-three and two-tenths percent (93.2%), and the maximum level is one hundred and four percent (104%);

(3) For cardiac surgery services, the minimum level is thirty-two percent (32%), and the maximum level is eighty-three percent (83%);

(4) For specialized neonatal services, the minimum level is four percent (4%), and the maximum level is one hundred seventy-four percent (174%); and

(5) For other specialized services, the minimum level is forty-nine percent (49%), and the maximum level is one hundred sixty-four percent (164%).

(e) The bureau shall publish the list of MS-DRGs included in each service category on its website, and the bureau shall update the list annually to reflect any changes as necessary.

(f) The bureau shall maintain rules implementing the requirements of this section. All rules promulgated by the commissioner of finance and administration or the bureau prior to and in effect on July 1, 2016, concerning the annual coverage assessment under this part or Chapter 276 of the Public Acts of 2015, shall remain in force and effect and shall be administered and enforced by the bureau until these rules are modified.