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.

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Representative Cooper Submits Letter to Biden Requesting Revocation of Modified Medicaid Block Grant

Representative Jim Cooper (D-TN-05) submitted a letter to President-elect Joe Biden requesting the revocation of the recently-approved TennCareIII. In his concluding remarks, Cooper claimed that the agreement was unethical and accompanied by potentially criminal affairs.

“There is still information surfacing about this unprecedented waiver, including secret side agreements that are unprecedented and probably illegal,” wrote Cooper. “As we learn more, enabling us to further evaluate our state’s cruelty to its deserving poor and its vulnerable hospitals, I will be back in touch with you.”

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Federal Government Approves Tennessee’s Medicaid Proposal, Swapping a Block Grant for an Aggregate Cap

The federal government approved Tennessee’s proposed Medicaid aggregate cap, granting a lump sum for a self-imposed, fixed budget. The ten-year agreement, referred to as “TennCare III,” is the first of its kind nationwide. It also allows for the state to reserve any unused funds and apply them to other government programs, with up to 55 percent of those savings potentially matched by additional federal funds for state health programs.

The Centers for Medicare and Medicaid Services (CMS) described the measure as an “innovative financing approach.” Unlike what various reports claimed, federal officials explicitly stated that this agreement wasn’t a block grant. This agreement allows the state government to be flexible with its spending cap under certain circumstances – like last year’s pandemic and related unemployment crisis. 

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