TennCare Acquiesces to CMS’s Demands for Demo Revisions

Bowing to CMS’s request after another public comment period, Tennessee is reluctantly pursuing a series of changes to the pending TennCare III demonstration that had been approved by the Trump administration for a start date of Jan. 8, 2021. In what one source says is an unusual back-and-forth on public display, the state will abandon its notorious plans to implement a closed Medicaid formulary and adopt a fixed funding mechanism.

Shortly before President Joe Biden took office, the Trump administration in January 2021 approved Tennessee’s request to use an “aggregate cap” for Medicaid funding that many industry observers had likened to a block grant. Through that approach, Tennessee would have received federal Medicaid funds based on a fixed budget target that is determined by CMS and the state using historical enrollment and costs data. If spending fell below that target cap but certain quality goals were met, the state would earn up to 55% of annual savings to reinvest back into other state health programs.

© 2022 MMIT
Lauren Flynn Kelly

Lauren Flynn Kelly Managing Editor, Radar on Medicare Advantage

Lauren has been covering health business issues, including drug benefits and specialty pharmacy, for more than a decade. She served as editor of Drug Benefit News (the predecessor to Radar on Drug Benefits) from 2004 to 2005 and again from 2011 to 2016, and now manages Radar on Medicare Advantage. Lauren graduated from Vassar College with a B.A. in English.

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