Advocacy Briefs

TennCare III Medicaid Program - April 2021

On January 8, 2021, CMS approved a waiver request from Tennessee that transitions nearly all of its TennCare II enrollees, including children, parents, and pregnant women, as well as many seniors and people with disabilities, into the TennCare III Medicaid program. And it’s been met with community opposition over fears that this new, updated waiver program sends the message that “Modified Medicaid Block Grants” and capped spending for enrollees, are (back) on the menu. 


Under such modified terms, states are required to meet minimum federal standards related to program eligibility, benefits, delivery systems, and program oversight. But, waivered programs can limit federal financing in the form of a “per capita” (per enrollee), or even an “aggregate cap”. 


States opting for an aggregate cap, instead, will be still subject to that cap without regard to changes in its Medicaid enrollment (up or down). States that opt-in to the aggregate cap metric and that meet CMS performance standards, could still access a portion of federal savings—but only if their actual spending is under the cap. CMS establishes the standard, base cap. 


Approval Timeline, Flexibility, and Enrollee Eligibility Concerns


While TennCare IIIs caps are tied to higher inflation and enrollment rates than the Tennessee historic growth average (which reduces exposure risks), the state can make changes in benefits levels and eligibility (through amendments). But problematic for many, TennCare III, in statute, doesn’t prohibit such changes regardless of its risk exposure. Given many health care rankings for populations across Tennessee, prohibitions like these are a real cause for concern.


This waiver is particularly significant not just to people on TennCare III, but to us all—because of the labyrinth-like approval process that got it where it is today and those precedent-setting provisions that, ultimately, shapes its: Financing, Drug Coverage (i.e. Limits on its Formulary), Duration (10 Years!) and Eligibility criteria. These factors alone make this waiver a prime candidate for review by the Biden administration.


TennCare III eligibility rules also impose work requirements in Medicaid. That means that beneficiaries need to verify employment, job search or training programs, for a set number of hours per week. They may also verify an exemption to receive or retain Medicaid coverage. That in and of itself is challenging, let alone the process (hoops) and time spent doing do enrollees need to maneuver.


Calling on Coalitions and Consumers


Coalitions of consumers and providers argue that vulnerable populations—especially communities of color and those with chronic conditions—could lose choice and access to quality health care services through cost-savings measures. Much like what we’re seeing in the Six Protected Class rule and in state-run Medicaid programs, offerings like these look to control—or capitate—over preserving all patient protections.


The incoming Biden Administration could rescind existing waiver guidance (such as guidance related to work requirements and capped financing) and/or issue new guidance. It could also review provisions in currently approved waivers and renewal requests, and move to withdraw or not renew waivers that do not promote program objectives.




Outgoing CMS Administrator Seema Verma had encouraged states to sign a “letter of agreement” that specified that future CMS determinations “suspending, terminating, or withdrawing a waiver” need to have an effective date no sooner than nine (9) months after the initial determination. It also outlined briefing schedules and real-world timelines for hearings to challenge said determinations.


These agreements will clearly make it more difficult for the Biden administration to amend or withdraw from prior waivers agreements that it determines to be inconsistent with its Medicaid program objectives.


Another clear reason to align protective class CMS rulings across Medicare and Medicaid.


Read More:

Gov. Lee signs Tennessee’s Medicaid block grant

Tennessee & Other Medicaid 1115 Waiver Activity: Implications for the Biden Administration



Copyright © 2024 National Coalition for LGBT Health | All rights reserved.