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TENNESSEE’S MEDICAID BLOCK GRANT WAIVER
Thousands of Tennesseans and respected health leaders from across the country opposed the state’s destructive TennCare Block Grant proposal. In the waning days of the Trump Administration, the federal Centers for Medicare and Medicaid Services (CMS) approved the plan anyway. CMS never accepted public comments, as required by law, and instead locked in the state’s plan for ten years.
The block grant scheme, called the “TennCare III Waiver,” is the first such deal ever approved by CMS. It creates a precedent that, if allowed to stand, will harm Tennesseans and undermine Medicaid across the country.
Here’s why it matters:
The block grant creates incentives to cut TennCare and use the resulting “savings” for other parts of the state budget. The block grant encourages the state to generate massive savings, but it’s impossible to simultaneously achieve significant health savings and maintain or increase access to healthcare coverage, especially because state officials tout how lean our program already is. The state has an abysmal track record hoarding money intended for Tennesseans in need. This takes away accountability and gives them even more money to mismanage.
There is no commitment to cover any additional people or any additional benefits. Any claims that the block grant will cover more people are not reflected in the deal that CMS approved. The promise that no enrollees or benefits will be cut is empty because they can (and have) erected administrative barriers for enrollment, redetermination, and authorization of services. The block grant allows the state to arbitrarily deny access to some prescription drugs for serious and costly illnesses, like cancer and hepatitis. This scheme gives the state less oversight and accountability over billions of taxpayer dollars.
The block grant is a political gimmick, not a serious answer to Tennesseans’ real health concerns. The TennCare III Waiver makes no mention of the pandemic or rural health and hospital closures. TN’s urgent healthcare needs deserve serious attention and real action from political leaders:
- The state’s handling of the COVID-19 pandemic led to one of the worst outbreaks in the world;
- TN is losing rural hospitals at a faster rate than any other state;
- TN’s loss of health coverage for kids is among the worst in the nation;
- Hundreds with addiction die because they are uninsured and cannot afford treatment;
- One third of TN adults have pre-existing conditions.
The block grant leaves money on the table that could be used to really improve our healthcare system. There is a better way to really address Tennessee’s urgent healthcare priorities without seeking a risky and damaging block grant that no other state is foolish enough to want. 37 other states (plus DC), led by governors and legislatures from both parties, have tapped federal funds to expand Medicaid to working families. Former Republican Gov. Bill Haslam proposed his Insure Tennessee plan but was blocked by the legislature. Such a plan would bring in $1.4 billion/year of new federal funds to address health priorities and give 300,000 Tennesseans the health coverage they need. And Congress has offered Tennessee another $900 million if it expands. If state officials are serious about improving health care, they should abandon TennCare III and adopt Gov. Haslam’s plan that puts our federal tax dollars to work helping Tennesseans.
The “savings” aren’t guaranteed. The shared savings of the block grant depend on the state meeting 10 quality metrics that have yet to be approved. No one has been able to beat medical inflation trends, and we are already starting from a very low base of per enrollee spending (the base CMS approved is much lower than what Tennessee submitted), so savings are contingent on drastic cuts. Compare this to the guaranteed $1.4 billion every year that our state could unlock if we accepted federal dollars to provide coverage to 300,000 more Tennesseans. Expanding Medicaid would provide a lot more money and it’s a tried-and-true program, compared to the block grant. The block grant is a booby trap that could devastate the state budget later down the road when the base is recalculated.
- Bill passed in the legislature. In late May, the legislature passed a bill directing Governor Lee to submit a proposal to the federal government asking to convert the state’s current Medicaid program (called TennCare) into a “block grant.” The bill specified that the governor needed to submit this proposal within 180 days.
- The state comment period began on Sept. 17 and ended Oct. 18. On Sept. 17, the legislature unveiled the block grant proposal which had been crafted by TennCare behind closed doors. The release of the draft proposal started a mandatory 30 day public comment period. Throughout the fall, Governor Lee and federal officials went on a massive educational tour about the block grant proposal in an attempt to convince Tennesseans that the block grant would be a good thing for their communities and families.
- November: Tennessee state officials submitted a revised version of the proposal to the federal government. From the day before Thanksgiving to the day after Christmas, the federal comment period for the new proposal occurred. The federal government is required to consider all public comments before approving the proposal.
- 6,124 comments were submitted to the federal government for consideration during the federal comment period. An overwhelming majority of those comments opposed the block grant.
- Just days before a new administration will take office, CMS officials have approved Tennessee’s Medicaid block grant waiver. In just a week’s time, Tennessee’s 112th General Assembly voted to authorize and move forward with the plan.
April 22, 2021
- Thirteen Medicaid beneficiaries, represented by the National Health Law Program, the Tennessee Justice Center (TJC), and King & Spalding LLP, filed a complaint in the US District Court for the District of Columbia challenging the Department of Health and Human Services’ approval of the TennCare III project through the end of 2030. A copy of the complaint can be accessed here.
August 10, 2021
- Federal officials invited the public to submit comments on the Tennessee Block Grant, known as the “TennCare III Waiver” which ended Sept, 9. After reviewing public comments, federal officials will decide whether to re-approve the TennCare III Waiver or require the state to make changes.
TennCare operates under a federal agreement known as a “waiver.” In the waning days of the Trump administration, the federal Centers for Medicare and Medicaid Services (CMS) approved a controversial new agreement, known as the “TennCare III Waiver,” which allows the state to convert TennCare to a modified block grant. The TennCare III locks in the block grant for the next ten years.
The Trump Administration failed to comply with a federal law requiring CMS to receive and consider public comments before approving the new waiver. On April 22, 2021, thirteen Medicaid beneficiaries, represented by the National Health Law Program, the Tennessee Justice Center, and King & Spalding LLP, filed a complaint in the federal District Court in Washington, DC challenging CMS’s approval of the block grant. The lawsuit was filed on behalf of TennCare enrollees with chronic, disabling conditions, a concerned physician, and TJC. The plaintiffs complain that the Trump administration’s failure to provide the required public comment period deprived them of the opportunity to voice their objections to the block grant. They also claim that HHS exceeded its authority and acted in an arbitrary manner when it authorized the new waiver.
The State of Tennessee has intervened in the lawsuit and is opposing TJC and the other plaintiffs. The State argues that the waiver was properly granted and should remain in effect.
In response to the lawsuit, the government asked the court to hold the lawsuit in abeyance until it has considered the comments made during the August-September comment period and make a new decision. TJC and the other plaintiffs agreed to pause the lawsuit, and the court approved the federal government’s request. It will probably take several months for CMS to review the comments and decide whether to still approve the Block Grant or to require the state to make reforms.
Watch the Expert Panel: New Tenncare? What Could Lie Ahead for Medicaid Patients, Providers and Other States
Letters from Patient Advocacy Groups regarding the block grant:
- January 2021 Letter from National Patient Advocacy Groups
- Disability Rights Education and Defense Fund Letter (July 2021)
- July 2021 Patient Advocacy Organization Letter
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The TennCare Block Grant Makes Health Disparities Worse
The TennCare Block Grant incentivizes the state to cut access to essential health care and divert the resulting “savings” to other state budget priorities. Like other policies that degrade health care for TennCare enrollees, the Block Grant will have the greatest impact on those groups who, because of their poverty and poorer health, are most reliant on TennCare for the medical and mental health care they need. The harm inflicted by the Block Grant will worsen Tennessee’s already shocking health inequities and deepen the state’s health and wealth disparities.
TennCare, like all states’ Medicaid programs, is designed to meet the needs of people with low incomes, and it is a principal source of coverage for people with disabling chronic conditions. It is therefore not surprising that Black Tennesseans, whose poverty rate is twice as high as that of white Tennesseans, and who have a greater burden of chronic disease and disability, are more than twice as likely as white people to feel the harmful effects of the Block Grant.* The TennCare Block Grant compounds the harmful effects of other state policies and systemic barriers that are rooted in racism and that worsen Tennessee’s gaps in access to care, and in overall health status.
Similarly, the Block Grant will have a disparate impact on rural Tennesseans, who are more likely to have low incomes and disabling illness, and who therefore are more likely to rely on TennCare for their coverage.
As a group, people (including older adults) with disabilities comprise the TennCare population that requires the most costly care, with needs ranging from long term services and supports to complex treatments for multiple co-occurring chronic conditions. It is impossible for the state to achieve the hundreds of millions in savings that state leaders seek through the Block Grant without going after high- cost care – and that means cutting the care of people with disabilities.
The TennCare Block Grant deepens economic, as well as health inequities. The Block Grant waiver denies retroactive coverage for eligible adults’ medical bills, burdening families with medical debts that TennCare would otherwise cover. The waiver thus burdens families with medical debt, including the many Black families who disproportionately comprise the TennCare population. Instead of serving Medicaid’s purpose of paying for medical care for those who cannot afford the cost of care themselves, the Block Grant denies coverage and thereby contributes to Tennessee’s large income and wealth disparities.
*Comparing census data with enrollment information released by the State of Tennessee’s Division of TennCare, at least 29.6% (345,000) of Black Tennesseans are enrolled in TennCare. By contrast, only 13.9% (769,000) of white Tennesseans rely on TennCare as their source of care.
Total TennCare enrollment is 1,551,000. Percentages do not include 262,000 enrollees who declined to state their race. Even if the entire 262,000 TennCare enrollees are assumed to be white, the percentage of Black people enrolled on TennCare would remain markedly higher than white people. In fact, because Black people are less likely than white people to disclose their race, the 262,000 are likely to have been disproportionately comprised of Black TennCare enrollees, making the percentage of Black people enrolled on TennCare even greater than is disclosed by the available data.
WHAT THE EXPERTS SAY
See who opposes this harmful waiver!
Experts agree that Medicaid block grants pose dire threats to our healthcare system and vulnerable individuals. The nation’s most respected patient advocacy groups oppose block grants as a threat to patients, and the Washington Post warned that Tennessee is about to sabotage its own health care system.
Thank you for submitting 6,124 comments to the Centers for Medicare and Medicaid during the 2019 federal comment period! Follow us on Facebook, Instagram, and Twitter for updates on the Medicaid block grant proposal.