DRT Opposes CMS Approval of TennCare Medicaid Service to Block Grant

January 8, 2021


Many Tennesseans with disabilities have their healthcare coverage through TennCare. TennCare is paid for with money from the State and the Federal governments. The Federal government has approved a new way of paying for TennCare called a block grant. A block grant is a set amount of funding for TennCare that doesn’t change over time. The way TennCare is funded impacts who can use it and what services users can get.  

Disability Right Tennessee (DRT) thinks block grant funding harms Tennesseans who use TennCare. This is because the needs of Tennesseans change when things like pandemics happen.  The users of TennCare may be hurt if the funding of TennCare cannot change to meet their needs. TennCare may not accept as many people into their program. People on TennCare may have to pay more for their healthcare. Or people on TennCare may not be able to get all the services they need. 

DRT opposes to use of block grant funding for TennCare.


NASHVILLE — Today, Centers for Medicare and Medicaid Services (CMS) approved TennCare’s block grant. Disability Rights Tennessee (DRT) has stated previously in public comment and maintains that this change in funding structure has grave consequences for Tennessee and those insured by TennCare.  


DRT and hundreds of stakeholders have opposed converting the current funding structure of Tennessee’s Medicaid program to a block grant. Our opposition is focused on the adoption of an untested funding mechanism to calculate the Tennessee block grant amount, which will inevitably result in limits on TennCare enrollment, reduction of benefits, and/or increased cost sharing for patients.  

The funding amount would be based on average TennCare enrollment during 2019 and annual increases using a pre-determined growth rate. Pre-determined growth rates cannot be predicted accurately in their static nature, but can certainly not account for devastating public health crises like the COVID-19 pandemic. Many groups predicted that a public health crisis would dramatically increase healthcare costs leaving Tennessee to pay without the support of matching federal funds.  

As predicted, 83,000 people have been added to the TennCare rolls since the COVID-19 pandemic began in March 2020. This will generate enormous and unexpected health care costs for a core population of children, people with disabilities, seniors, and those experiencing poverty. Although we are just beginning to understand the long-term impact of COVID-19 on patient health, if the block grant is implemented, health care costs will exceed the capped funding amount.    

The consequences are predictable. As the gap between the block grant and the actual costs of care widens, the pressure on Tennessee to limit TennCare enrollment, reduce benefits, or increase cost-sharing for patients will rise. Cuts eliminating coverage for certain treatments and imposing additional barriers to necessary services will be made. Tennessee could also end coverage for those deemed too expensive to cover, like those with disabilities or chronic diseases. Tennessee might also slash provider payments to stabilize spending further curtailing access to doctors. Simply put, it will be more difficult for TennCare recipients to access medical care with a funding structure that cannot respond to changing healthcare environments. 


Also of dire concern is that the block grant would impose the creation of a closed pharmaceutical drug formulary, having only one drug per therapeutic class available. This imposes an unacceptable risk on TennCare’s core population. Many struggle with chronic illnesses and seizure disorders and need multiple medications. Patients who have tried and failed a particular drug need access to appropriate treatment without a burdensome prior authorization process for physicians.    


The COVID-19 pandemic has demonstrated the fiscal irresponsibility of relying on a funding mechanism that disregards public health emergencies. Proceeding with the block grant knowing that huge health care spending deficits loom puts Tennessee and TennCare recipients at enormous risk. The imposition of a closed formulary disregards the complex medical issues faced by TennCare’s core population. Let’s bid an Auld Lang Syne to an ill-conceived block grant proposal and work to ensure TennCare’s continued health, financial stability, and viability.    


About Disability Rights Tennessee (DRT) 

Disability Rights Tennessee (DRT), formerly Disability Law & Advocacy Center of Tennessee, is the designated protection & advocacy agency for Tennessee. DRT provides free legal advocacy services to protect the rights of Tennesseans with disabilities. For 40 years, DRT has served over 50,000 people through direct services, education, and systemic advocacy. For services, call 1 (800) 342-1660 or email GetHelp@disabilityrightstn.org


Facebook: www.facebook.com/dlactn  

Twitter: www.twitter.com/TNrights 


Kelsey Loschke, Disability Rights Tennessee


(615) 732-6965


Statement from the State

Approved Waiver Amendment