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Bowing to CMS’s request after
another public comment period, Tennessee is reluctantly pursuing a series of
changes to the pending TennCare III demonstration that had been approved by
the Trump administration for a start date of Jan. 8, 2021. In what one source
says is an unusual back-and-forth on public display, the state will abandon
its notorious plans to implement a closed Medicaid formulary and adopt a
fixed funding mechanism.
Tennessee will comply with
CMS’s requests
- After reviewing
feedback from a comment period that closed on Sept. 9, 2021, CMS on June
30 issued a letter advising the
Division of TennCare to propose changes to address the agency’s concerns
that certain items may not promote the objectives of Medicaid and
warrant support under section 1115 authority.
- While CMS said
it was “evaluating a range of actions,” it made three specific asks of
Tennessee: To relinquish permission to implement a closed formulary,
submit a new financing and budget neutrality model based on a
traditional per member per month cap instead of an aggregate cap, and
include a request for expenditure authority for state reinvestments in
initiatives that the state would like to support with budget neutrality
savings.
- In its latest amendment, which was
submitted to CMS on Aug. 30, the state conceded on all three points
after “careful consideration.”
- At the same
time, the state proposed a revised framework for recognizing savings
achieved under the demonstration and reinvesting those savings in the
TennCare program.
Public forum for waiver
negotiations is unusual
- While it’s not
unusual for states and CMS to go back and forth on various amendments to
a demonstration waiver, the TennCare situation is rather unique for how
it’s playing out in such a public way and resulting in CMS effectively
unapproving something that had been authorized by a previous
administration, observes Margaret Scott, associate principal with
Avalere Health.
- “My read of the
letter is that Tennessee is saying that…the entirety of the 1115 waiver
budget neutrality is similar across all states and that Tennessee’s
version of this was not entirely different than what all states used for
their 1115 waivers,” says Scott. “I think CMS sees that differently, so
there was enough nuance and enough difference in Tennessee’s model that
the new administration was not comfortable with the calculations.”
- And although
Tennessee is complying with CMS’s requests to amend the waiver, “they
make clear in the letter that they disagree with CMS about making the
changes,” she adds. “They take every opportunity to say, ‘We don’t think
this is the right course of action, but we’re going to do it because you
asked us to.’”
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