Tennessee block grant approved, making it the 1st state to get Medicaid funding in a lump sum

Posted at 2:46 PM, Jan 08, 2021
and last updated 2021-01-08 16:08:09-05

NASHVILLE, Tenn. (WTVF) — Gov. Bill Lee says Tennessee has become the first state in the nation to be approved to receive funding in a lump sum for its Medicaid program through a block grant program.

The waiver amendment received approval Friday by the Centers for Medicare and Medicaid Services (CMS). Republicans contend that states need more flexibility to shape their Medicaid programs while also being given the opportunity to rein in spending.

“Today’s agreement represents a continuation of Tennessee’s commitment to innovate, lead and improve,” Gov. Lee said in a press release. “We have sought to fundamentally change an outdated and ineffective Medicaid financing system that incentivizes states to spend more taxpayer dollars rather than rewarding states for value, quality and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. 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.”

TennCare submitted Amendment 42 to CMS in November 2019 in accordance with legislation adopted by the Tennessee General Assembly during the 2019 legislative session. The legislation directed the governor to submit the waiver for federal approval.

“We approached our negotiations with CMS and the ultimate agreement with one overriding question and directive from Governor Lee – Will this plan benefit Tennessee, our TennCare program and the people we serve,” said Stephen Smith, TennCare Director. “We are convinced the answer is yes. This gives Tennessee the real opportunity to enhance the services we provide to Tennesseans.”

Democrats, however, have warned that spending caps might cause states to purge their rolls or reduce services. Democrats instead want to widen Medicaid eligibility.

President-elect Joe Biden can rescind the change, but the director of Tennessee’s Medicaid program said there will be no reduction in services, in eligibility or in the amount paid to providers. Representative Jim Cooper took to social media, saying the Biden administration will do just that.

Senator Bill Hagerty released a statement of his support of the approval:

“Tennessee has a strong history of conservative stewardship of taxpayer dollars. As a result, the State of Tennessee is being entrusted with the opportunity to reap the rewards of good stewardship by sharing the savings that result from TennCare’s efficient operation, which can then be invested in improving the health of TennCare members, rather than being kept by the federal government. I appreciate the hard work of Governor Lee’s administration and the Trump administration to pioneer this new, more effective approach to providing health care services.”

Editor's Note: The AP contributed to this article.