Tennessee Code Title 56. Insurance § 56-7-2362

(a)(1) If authorization is given and a pharmacy claim is adjudicated by a health insurer or its agent to any pharmacy services provider for care to be delivered to a covered beneficiary under any individual, franchise, blanket or group health insurance policy, medical service plan corporation contract, hospital service corporation contract, hospital and medical service corporation contract or fraternal benefit society, the health insurer acting directly or by delegation through an agent acting on behalf of the health insurer shall not subsequently rescind or modify that authorization or deny the authorized payment to the pharmacy services provider for the authorized service after the provider renders the authorized service in good faith and pursuant to the authorization, except for payments made as a result of the provider's misrepresentation or fraud.

(2) If the bureau of TennCare provides notice to the health insurer or its agent that a person is eligible to participate in the TennCare program, and, if based on good faith reliance on the information, the health insurer makes a payment to a pharmacy provider for providing pharmacy services to the person enrolled in the TennCare program, and, if the bureau of TennCare later rescinds the eligibility for the person, then the bureau of TennCare shall remain liable to the health insurer for any amount the health insurer paid to the provider for the pharmacy services. The bureau of TennCare shall not be liable when the eligibility is rescinded in the case of fraud or death as defined in the contract. The bureau of TennCare shall not be liable due to an error or delay on the part of the managed care organization or its agents in processing eligibility information received from the bureau of TennCare.