Lawmakers race to vote on Tenncare block grant
Tennessee’s Republican lawmakers are speeding toward final votes on a landmark Tenncare transformation by Friday in hopes of making it harder for President-elect Joe Biden to reverse the decision after he takes office next week.
Lawmakers in both the House and the Senate plan to vote on a joint resolution adopting a proposal to convert billions of federal Tenncare funding to a block grant. Votes come about a week after the administration of President Donald Trump approved the block grant plan as part of a 10-year Medicaid waiver in the final days days of his presidency.
At least some lawmakers believe approving the block grant before Biden’s inauguration will make it more difficult for his administration to reverse course.
“I makes it very difficult for them to retract this,” said House Majority Leader William Lamberth, R-portland, while convincing colleagues to hasten the vote. “Because we have negotiated in good faith with the federal government, regardless of who the individuals in those particular roles are. So that’s why it is time sensitive.”
The transition to a block grant will introduce new limits on federal funding for Tenncare, the state’s Medicaid program, in exchange for giving state officials more control over the coverage offered by the program. If the state can use this authority to reduce Tenncare spending, it gets to keep about half of whatever money that is leftover.
Tennessee could stop covering medications
State officials repeatedly insisted they have no intentions to reduce enrollment or coverage through the block grant but confirmed their new authority will permit them to stop covering some medications.
“The success of this agreement is not based on the state spending less money in its Medicaid program,” Tenncare Director Stephen Smith told lawmakers. “There are no cuts to eligibility, there are no reductions in benefits, no reduction to services and no reductions to what we pay our providers.”
The block grant votes, which appeared poised to occur in the House and Senate on Thursday after news print deadline, are a clear deviance from norms in the Tennessee General Assembly. Lawmakers almost never debate legislation in the first week of session, which is normally reserved for scheduling and organization, and yet a block grant resolution is expected to be hustled through about six committees in two days so it can get a vote by the end of the week.
Procedural rules normally require legislation to move through committees at a slower pace, but Republicans suspended the rules on Wednesday, over the objections of Democrats, so the block grant resolution could be rushed.
Senate Minority Leader Jeff Yarbro, D-nashville, who opposed the resolution as it rocketed through committee, questioned if lawmakers truly understood what they were voting on. The 200-page Medicaid waiver impacts a third of the state budget, he said.
If the deal is so great, he asked, then what’s the hurry?
“If this is as good of a proposal … as what has been suggested, I don’t understand why we would pass it in at a time when we don’t usually even consider legislation,” Yarbro said in a Senate health committee meeting. “It’s just a gigantic break from tradition.”
House Speaker Cameron Sexton said lawmakers have only 30 days to approve the waiver and he was worried about “running out of time” if the resolution was not approved before a special session focused on education next week.
Lawmakers are likely to approve the block grant since it was their idea in the first place. The state’s Republican majority passed legislation in 2019 requiring Gov. Bill Lee to ask for this Tenncare waiver. The initial block grant plan was wildly unpopular – receiving only 11 supportive public comments out of about 1,800 – but the Lee Administration insisted the public comments did not represent the true public sentiment.
The proposal was officially submitted to the Centers for Medicare and Medicaid Services in November 2019, then approved 14 months later as Trump had just 12 days left in office. By law, the block grant can’t be implemented until it receives final approval from the General Assembly.
Melinda Buntin, a Vanderbilt health policy expert who reviewed the latest block grant waiver since it was approved by the Trump administration, said it did not appear the waiver would have any immediate impact even if approved by lawmakers this week.
Buntin said the waiver gave Tenncare authority to expand eligibility or benefits, but the agency still can’t reduce either without approval from the federal government. Tenncare would eventually be able to renegotiate drug prices and stop covering some drugs, but this change could take “more than a year to implement,” she said.
“That’s the kind of thing that if the new administration were to re-open negotiations about this, that certainly wouldn’t have been implemented yet,” Buntin said.
‘Treating Tennesseans like guinea pigs’
The block grant plan fundamentally transforms the funding structure of Tennessee’s Medicaid program, called Tenncare, which provides health insurance to pregnant mothers, low-income families and many people with disabilities. Tenncare covers about one in every five Tennessee residents.
Under the current Medicaid system, the federal government pays for the majority of Tenncare costs with uncapped funding that rises and falls with enrollment. The block grant will cap this funding, with exceptions, and give state officials more authority over Tenncare. If federal funding is saved as a result of state control, the state keeps half to reinvest in government health programs.
Ultimately, this funding structure is an untested, Republican-backed alternative to the Medicaid expansion allowed under the Affordable Care Act, commonly known as Obamacare. Biden campaigned on improving Obamacare, so it is unlikely he will embrace a new Medicaid model created as a counter to his platform.
U.S. Rep. Jim Cooper, D-nashville, urged the president-elect to rescind approval in a public letter early this week, insisting it is “not in the best interest of Tennesseans.”
“This radical waiver makes Tennessee the first block grant Medicaid state, in other words, treating Tennesseans like guinea pigs,” Cooper wrote.
“CMS had eighteen months to approve the waiver but is now cramming it in at the last minute in an ideological and illegal effort to handcuff your Administration and to further damage the health of Tennesseans.”
The New York Times reported last week that Biden will “almost certainly” seek to undo the block grant approval but the Trump administration has taken steps to hamper this reversal. Seema Verma, the outgoing CMS administrator, has urged state Medicaid directors to quickly sign contracts that prevent the federal government from ending a Medicaid waiver with less than nine months of notice, according to the Times.
These efforts could be effective in slowing the rollback of the block grant by the Biden administration, according to a review of the waiver by the Sycamore Institute, a nonpartisan Nashville thinktank. Sycamore said Thursday that CMS recently established a new process for ending Medicaid waivers that takes at least nine months and gives states “a window of opportunity to appeal.”
Smith, the director of Tenncare, told lawmakers this week his agency had no conversations with the Biden transition team about the block grant proposal.
If the Biden administration reverses the approval, Tenncare will need to “negotiate a new waiver” and will effectively be “back to square one,” he said.
Tennessean politics reporters Natalie Allison and Yue Stella Yu contributed to this story.