Tennessee’s Medicaid block grant proposal delayed by virus

Tennessee’s proposal for a Medicaid block grant — a plan with the potential to transform health care for the poor and uninsured across the state — is still under consideration by the Trump administration but has been delayed by the coronavirus pandemic, a top federal official said Friday.

Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, said the “interesting” block grant proposal remains a “high priority” for the Trump administration but is awaiting a complete review. Verma did not provide a timeline for review.

“We’ve been focused on [coronavirus]. That being said, it is a high priority for the administration to look at the governor’s application, and we are working on that very intensely,” Verma said.

“We just really appreciate the thinking being behind it, the innovative approach. Generally, our philosophy is that states are in the best position to run their Medicaid programs, and we want to give them as much flexibility as possible, so they can do the best by the people they serve.”

The administration of Tennessee Gov. Bill Lee submitted the block grant proposal in November 2019. At the time, officials said it would take at least six months to receive a response from federal officials. However, that was before the coronavirus pandemic interrupted nearly all aspects of American life.

Tennessee’s block grant proposal is the result of a long-debated Republican effort to overhaul TennCare, which insures about 1.4 million Tennesseans, without expanding Medicaid, as most states have done. TennCare currently receives uncapped funding that can grow with demand, but the program is administered under oversight from the federal Centers for Medicare and Medicaid Services.

The proposal would convert nearly $8 billion in federal funding to a block grant, then give state officials more authority to change TennCare coverage. State officials would also be freed from much federal oversight and could decide how to change TennCare coverage. If TennCare then operates at a lower cost, the state gets to keep half of any leftover money.

If approved by the Centers for Medicare and Medicaid Services, the block grant would still need to receive final approval from the governor and state lawmakers. Tennessee would be the first state in the nation to change its Medicaid program in this way.