MEMPHIS, Tenn. (AP) -- TennCare is preparing to implement new guidelines that would put upper and lower limits on payments to hospitals.

The idea is to limit the disparity between what two different hospitals are paid for the same treatment.

The disparity exists because TennCare contracts with insurance companies that negotiate rates with hospitals and clinics.

Tennessee Hospital Association President Craig Becker told The Commercial Appeal the new guidelines were needed to placate hospitals that get paid at the lower end of the scale. They are expected to go into effect in July.

Becker said the Hospital Association began negotiating the changes with TennCare in 2010. That's when the group needed hospitals across the state to support a fee on their revenues that was used to shore up TennCare after budget cuts.