(Story updated at 9:10 p.m. ET)
The CMS granted Tennessee a two-month temporary extension on a Medicaid managed-care waiver that expired Thursday.
TennCare, the state's managed-care Medicaid system, was authorized in 2002 under an 1115 waiver. TennCare members mostly are low-income pregnant women, children and individuals who are elderly or have a disability. The program had 1.5 million people as of May and has an annual budget of $10 billion.
The program covers approximately 20% of the state's population, 50% of the state's births and 50% of the state's children. A spokeswoman for TennCare said state officials wanted a short-term extension until they negotiated terms of a permanent solution.
The CMS' has increasingly resisted paying for healthcare for the uninsured now that most of them have access to coverage under the Affordable Care Act. That issue has been a hurdle in renewing 115 waivers in other states, including California, Texas and Florida.
California, Florida, Tennessee and Texas have relied on the waiver's pools of money that pay for the hospital stays of patients who can't afford it.
Since 2010, Tennessee has received $500 million annually under its uncompensated care fund known as the Unreimbursed Hospital Cost pool. Last summer, the state hired a consulting group to analyze further need of the pool, a concession to a CMS request. The firm found the pool was critical to ensure access to care and was necessary even with an expansion.
“Even with Medicaid expansion, at least $229 million in uncompensated care shortfall remains,” the March 2016 report by Public Consulting Group said.
Attempts to expand Medicaid in Tennessee have failed. Last year, Republican Gov. Bill Haslam proposed an extension of healthcare coverage to 280,000 low-income residents.
