Tennessee Releases Its Block Grant Plan

This month, Tennessee continued its pursuit of a Medicaid block grant, unveiling its draft Medicaid waiver amendment application on September 17th. Underpinning Tennessee’s months-long exploration of this model is the current federal administration’s interest in supporting these types of proposals—with implementation guidance expected to be released, but still under review, by the Office of Management and Budget.

Health Policy News first reported on Tennessee Governor Billy Lee’s interest in pursuing a Medicaid block grant waiver in our state healthcare reform roundup last March. Later in the spring, we reported on the state’s first tangible step forward in this process: the passage of state legislation requiring the state to submit a block grant proposal to the federal government within six months. The release of the draft application, which provided the public with its first look into the proposal’s details, marks yet another step forward for the state.

Plan Details

Tennessee is seeking a $7.9 billion “modified” block grant, and, according to the administration, neither current eligibility nor services will be cut under the new plan. Tennessee’s proposal varies from a traditional block grant proposal in several manners.

The Tennessee plan calls for the federal government to increase its Medicaid funding to the state if enrollment grows beyond initial state projections.

Additionally, only core medical services would be included in the waiver; the following items would be excluded from the block grant and continue to be funded as they are today:

  • Prescription drugs,
  • Uncompensated care payments,
  • Administrative costs,
  • Targeted case management services for children in state custody,
  • 1915(c) waiver services, and
  • Services for the dual Medicare-Medicaid eligible

The proposal also includes a shared savings component, under which the state would keep 50 percent of any unspent block grant funds to reinvest in the TennCare program without a state match requirement. The waiver notes that the state may expand coverage under Medicaid outside of the block grant (at least initially) in the future.

Overall, the administration concludes that by virtue of the block grant, Tennessee would have “flexibility from excessive or unnecessary federal intervention in its Medicaid program.”

Next Steps

Next, the state must collect public comment on the waiver amendment application before submitting it to the federal government by November 20th (in accordance with the timeline set forth under the state statute). If the waiver request is approved, Tennessee would become the first state to receive a block grant for its Medicaid program—though other states are also considering similar options. Despite Tennessee’s continued progress, however, it remains uncertain whether a Medicaid block grant waiver will be approved and its implementation permitted.

 

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