Tag Archives: Tennessee

What are the risks and considerations of Medicaid block grants?

In September 2019, the State of Tennessee, Division of Tenncare, released a draft version of Amendment 42 to its Section 1115 Demonstration Waiver, “Tenncare II Demonstration.” With the exception of pharmacy and certain waiver services, the vast majority of Tennessee’s Medicaid program services are funded under this Section 1115 Demonstration Waiver authority. Amendment 42 makes Tennessee the first state to take concrete steps to engage the Centers for Medicare and Medicaid Services in a proposed block grant funding methodology.

A block grant funding arrangement is attractive from a federal financing perspective because it establishes an authorized level of spending, creating an incentive for states to better control costs. States could also find this structure attractive because it includes a savings component if efficient management of the program produces costs below the authorized spending levels.

This paper by Milliman’s Jeremy Cunningham and Mat DeLillo discusses the risks and considerations of changing Medicaid’s funding formula to a general block grant structure.

Increased demand for outpatient facilities in Tennessee

Kaiser Health News picks up on a story first reported in The Tennessean:

Nashville-area hospitals are adding more services closer to where people live, hoping to attract better-paying, commercially insured patients — as well as provide basic care and medical tests in settings that don’t require an overnight stay. After taking a pause on construction amid a slower economy, hospitals here are once again starting to invest in outpatient services — often in suburban settings — to bring medical tests and minor surgeries to the places where many people live. … The outpatient boom is part of a national trend. In the past two years, hospital outpatient care has accounted for the most growth in health-care spending for the typical American family of four, according to actuarial consulting firm Milliman. From 2009 to 2010, it rose to 17.1 percent of total costs, outpacing growth in other categories such as inpatient care, physician services and prescription drugs.