More than a year after submitting Amendment 42 to the Centers for Medicare and Medicaid Services (CMS) requesting a waiver to increase flexibility in the administration of the state's Medicaid program, Tennessee has received an affirmative nod to move forward.
In November 2019, the state submitted a modified block grant to CMS to innovate the TennCare program. "We have made good on a commitment toward modernizing our health system," stated Governor Bill Lee. "I said from the beginning we would only accept a deal that is good for Tennessee and Tennesseans, and I believe we have done just that. This is an important, historic day for Tennessee."
Lee noted with the new flexibility, the state would have the opportunity to gain additional federal funding through shared savings without sacrificing eligibility, services or provider rates. "Today's agreement represents a continuation of Tennessee's commitment to innovate, lead and improve," he said. "We have sought to fundamentally change an outdated and ineffective Medicaid financing system that incentivizes states to spend more taxpayer dollars rather than rewarding states for value, quality and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."
On a call today with reporters, CMS Administrator Seema Verma stressed the waiver, approved for 10 years, is structured to ensure the state doesn't benefit from cutting enrollment or services to achieve savings. "Tennessee may only supplement ... and not reduce ... benefits from where they are today," she explained. If Tennessee, which has traditionally spent less that other states in administering the Medicaid program, continues on that trajectory while meeting quality targets, the savings would be shared with the state to reinvest in programming to address items including maternal health coverage enhancement, social determinants of health, more quickly serving those with intellectual and developmental disabilities and the ability to address state-specific health issues.
Verma noted, "The TennCare III demonstration builds on all the good ideas that have been out there around a new financing model for Medicaid but addresses many of the most prominent concerns. This groundbreaking wavier puts guardrails in place to ensure appropriate oversight and protections for beneficiaries, while also creating incentives for states to manage costs while holding them accountable for improving access, quality and health outcomes. It's no exaggeration to say that this carefully crafted demonstration could be a national model moving forward."
With the approval coming just 12 days before President-Elect Joe Biden takes office, the governor and administrator were asked if the waiver could be quickly revoked. "We've shown partnership is a better model than dependence," said Lee. "I think it would be a mistake to backtrack on a modernized approach. I don't expect that to happen."
Similarly, Verma said the move towards this type of innovation spanned more than one administration, and she noted the waiver was carefully vetted by career staff. "I think this program should not be subject to political whims," she said. However, Verma admitted, the new Health and Human Services Secretary does hold the right to approve, deny or terminate waivers. The state would have the opportunity to appeal a termination decision if it were to happen.
Nashville Medical News plans to take a deeper dive into TennCare III and what it means for patients, providers and the state in our February/March print edition.