Tennessee Legislature Approves Modified Block Grant for State’s Medicaid Program


Tennessee’s General Assembly approved the Medicaid waiver, granting the state to apply federal healthcare funding to an aggregate gap model of spending. The legislature filed the bill when it first convened on Tuesday. Just three days after the bill’s introduction, legislators took their final votes on Thursday and Friday. The six subcommittees who reviewed the waiver all recommended its passage over the course of a few days.

The waiver allows the state to establish a self-imposed, fixed budget to last over a ten-year period, known as TennCareIII. It also allows the state to reserve a portion of the unused funds and apply them to other government programs, with potential for those savings to be matched with additional federal funds for healthcare programs.

The Centers for Medicare and Medicaid Services (CMS) granted the waiver on January 8. Governor Bill Lee praised the approval as a means of prudent spending by the state government.

“We have sought to fundamentally change an outdated and ineffective Medicaid financing system that incentivizes states to spend more taxpayer dollars rather than rewarding states for value, quality, and efficiency,” stated Lee. “Our approved plan will create an unprecedented opportunity for Tennessee to be rewarded for its successful administration of TennCare and further improve the health of TennCare members and Tennessee communities with that reward.”

Representative Jim Cooper (D-TN-05) called the waiver “unprecedented” and claimed that it was accompanied by “secret side agreements” that were also “unprecedented and probably illegal.” He also claimed that the TennCareIII approach to Medicaid funding would reduce the amount of individuals receiving healthcare. In a letter to President-elect Joe Biden, Cooper requested a revocation of the waiver.

Biden has the authority to reverse the approval. Although he has opposed block grants, there hasn’t been explicit confirmation from him or his team that he would revoke the waiver.

TennCare Director Stephen Smith stated that the agreement wouldn’t cause the state to spend less on its Medicaid program.

“There are no cuts to eligibility, there are no reductions in benefits, no reduction to services, and no reductions to what we pay our providers,” explained Smith.

The Fiscal Review Committee included a note on the waiver’s estimated fiscal impact, which confirmed Smith’s statement in length. In addition to the note’s explanation of the waiver, it also noted that CMS only anticipates a positive impact on eligibility and enrollment by expanding both. The committee stated that it couldn’t provide an exact fiscal impact, and that increased federal funding estimates wouldn’t be known until this fall at the earliest.

– – –

Corinne Murdock is a reporter at The Tennessee Star and the Star News Network. Follow her latest on Twitter, or email tips to [email protected]





Related posts

2 Thoughts to “Tennessee Legislature Approves Modified Block Grant for State’s Medicaid Program”

  1. William Delzell

    Tennessee needs Medicaid!

  2. 83ragtop50

    Cooper’s real concern is that the bulk of his voters might lose their access to medical welfare.