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CMS Approves Tenn. Medicaid Block Grant

On Jan. 8, the Centers for Medicare & Medicaid Services (CMS) approved a Medicaid block grant proposal for Tennessee that would dramatically change the financing structure of TennCare, the state’s Medicaid program. This is the first approval of its kind and will allow the state to have more control over financing its Medicaid program.

Notable aspects of the approved proposal include:

  • TennCare’s block grant was approved as a 10-year experiment, which is significant as most CMS waiver approvals sunset at 5 years;
  • as part of the block grant, the state will receive a lump sum of money from the federal government for their Medicaid program instead of open-ended federal funding that rises with higher enrollment and health costs;
  • unlike traditional block grants, Tennessee’s annual funding would still increase with enrollment increases, but it would not be directly related to per person Medicaid expenses; and
  • if the state spends lower than the block sum, it will be able to share in savings for services related to health.

On approval from the administration, the block grant proposal will go through final legislative approval at the state. America’s Essential Hospitals will track action on this subject.

Contact Senior Director of Policy Erin O’Malley at eomalley@essentialhospitals.org or 202.585.0127 with questions.

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About the Author

Abigail Painchaud is a policy associate at America's Essential Hospitals.

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