Trump administration reviewing Tennessee’s Medicaid block grant request

Lee on Medicaid Block Grant

MEMPHIS, Tenn. (WMC) - The Trump administration is reviewing Tennessee’s request to change how the state’s Medicaid program, TennCare, is funded. State leaders submitted a 60-page application to the Centers for Medicare and Medicaid Services Nov. 20.

If approved, Tennessee would become the first state to get its federal Medicaid funding through an annual block grant.

The federal government currently provides 65 percent of TennCare's funding. Under the plan state leaders submitted, the federal government would send Tennessee a lump sum of money through a block grant, which is estimated to be $7.9 billion in the first year.

Supporters of block grants say they give state leaders more of a say in how the money is spent.

“This innovative proposal reimagines the Medicaid financing structure in ways that emphasize state accountability for effective program management while incentivizing performance and ensuring that financial responsibility for Tennessee’s Medicaid program continues to be equitably shared between the state and federal government,” the state wrote in its application.

Tennessee Gov. Bill Lee said he hopes the Trump administration approves the state’s application.

"We're very hopeful that they do. It's going to be really good for Tennessee if they do," said Lee.

There are 1.4 million people enrolled on TennCare, about one in every five Tennesseans, according to state figures.

Lee says block grant funding will mean better services for those enrolled.

"We'll be able to provide more services to our neediest Tennesseans through TennCare," said Lee. "We've been working with the federal government to get to a point where we believe that they can strongly consider this proposal."

If any federal money is not spent, the state would be entitled to half of the savings.

At a public hearing in October, critics said this could incentivize the state to cut benefits.

"I think the greatest danger is cuts to Medicaid and how that's going to impact access, especially in Tennessee where access is already such a predominant issue, where we have hospital closures all across the state,” said Francie Hunt, executive director of TN Advocates for Planned Parenthood.

"I'm concerned without expansion of TennCare and with further shrinkage of TennCare by block grants, that there will be fewer women who have adequate care,” said Dr. Craig Sander, a Memphis neonatologist.

In its application, the state argues that cuts won't happen because a limit on TennCare's federal funding would remain in place.

“The state appreciates the many thoughtful comments it received about the possible impact of a federal block grant on care provided under the TennCare program,” the state wrote in its application. “However, the state emphatically disagrees that [the proposal] creates some new incentive for the state to reduce TennCare expenditures on member care.”

In a speech delivered to the National Association of Medicaid Directors just one week before Tennessee submitted its application, the head of the federal agency which must decide Tennessee's request said she was "encouraged" by the interest in block grants.

“Many states have expressed a willingness to be held accountable for improving outcomes in exchange for greater flexibility and budget certainty. Block grant and per capita cap proposals are two such alternative financing approaches,” said Seema Verma, the administrator for the Centers for Medicare and Medicaid. “We are encouraged by this interest.”

For now, Tennessee leaders wait for a decision.

"I think anything earlier than six or seven months would be too soon to expect anything,” said Lee. “So, probably sometime next summer.”

The federal government is taking public comments on Tennessee's proposal. To leave a comment, visit Medicaid’s public comments page.

To read the state’s application, including its response to some of the general criticism against the plan, click here.

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