NASHVILLE, Tenn. – After more than a year of discussions and negotiations with the federal government, Tennessee’s Medicaid “Block Grant” waiver amendment received approval today by the Centers for Medicare and Medicaid Services (CMS).  Tennessee is the first state in the nation to be granted approval for this type of block grant arrangement, which will result in an innovative, alternative financing arrangement for its Medicaid program and provide additional flexibilities relative to its administration.

TennCare submitted Amendment 42 to CMS in November 2019 in accordance with legislation adopted by the Tennessee General Assembly during the 2019 legislative session.  The legislation directed the governor to submit the waiver for federal approval. 

The negotiated agreement includes the major components and principles outlined in TennCare’ s original proposal to CMS, building upon Tennessee’s history of effective management of its Medicaid program and providing opportunities for additional federal funding for the purpose of improving the health of TennCare members and communities throughout the state.

“Today’s agreement represents a continuation of Tennessee’s commitment to innovate, lead and improve,” said Governor Bill Lee. “We have sought to fundamentally change an outdated and ineffective Medicaid financing system that incentivizes states to spend more taxpayer dollars rather than rewarding states for value, quality and efficiency. Our approved plan will create an unprecedented opportunity for Tennessee to be rewarded for its successful administration of TennCare and further improve the health of TennCare members and Tennessee communities with that reward.”

“We approached our negotiations with CMS and the ultimate agreement with one overriding question and directive from Governor Lee – Will this plan benefit Tennessee, our TennCare program and the people we serve,” said Stephen Smith, TennCare Director. “We are convinced the answer is yes.  This gives Tennessee the real opportunity to enhance the services we provide to Tennesseans.”

Pursuant to Public Chapter 481, from 2019, implementation of the waiver agreement must be authorized by the Tennessee General Assembly. 

The approved waiver amendment is available on the Division of TennCare’s website at https://www.tn.gov/tenncare/policy-guidelines/tenncare-1115-demonstration.html. 

About TennCare

TennCare is the state of Tennessee’s Medicaid program which provides health insurance to approximately 1.5 million low-income Tennesseans including pregnant women, children, caretaker relatives of dependent children and older adults, and adults with disabilities.  With a satisfaction rating above 90 percent since 2009 TennCare provides health insurance, including long-term services and supports, through the use of managed care.   

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