With New Comment Period, CMS Will Reassess TennCare Cap

As the Biden administration continues to dash states’ dreams of implementing Medicaid work requirements — most recently revoking waiver approvals granted to Ohio, South Carolina and Utah by the Trump administration — CMS this month took a critical step in revisiting Tennessee’s plans to use a fixed funding mechanism. With the opening of a new 30-day federal public comment period regarding the approval of TennCare III, experts anticipate a great amount of negative input that will lead the program to a fate similar to that of work requirements.

The Trump administration on Jan. 8 approved Tennessee’s request to use an “aggregate cap” approach to Medicaid funding that many industry observers have likened to a block grant. The outgoing administration approved the state’s section 1115 waiver demonstration for 10 years. Through the unprecedented approach, Tennessee will receive federal Medicaid funds based on a fixed budget target that is determined by CMS and the state using historical enrollment and cost data. If the state spends less than its target cap while meeting yet-to-be determined quality goals, it can earn up to 55% of annual savings to reinvest back into other state health programs. That waiver also allows the state to implement a commercial-style closed drug formulary.

© 2024 MMIT
Lauren Flynn Kelly

Lauren Flynn Kelly Managing Editor, Radar on Medicare Advantage

Lauren has been covering health business issues since the early 2000s and specializes in in-depth reporting on Medicare Advantage, managed Medicaid and Medicare Part D. She also possesses a deep understanding of the complex world of pharmacy benefit management, having written AIS Health’s Radar on Drug Benefits from 2004 to 2005 and again from 2011 to 2016. In addition to her role as managing editor of Radar on Medicare Advantage, she oversees AIS Health’s publications and manages the health editorial staff. She graduated from Vassar College with a B.A. in English.

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