The pool of funds is part of a larger waiver that enables the state to have a managed Medicaid system. The scuffle is holding up the renewal of the entire $10 billion waiver that covers 1.5 million lives.
TennCare, the state's managed-care Medicaid system, was authorized in 2002 under an 1115 waiver. It initially expired June 30, but was extended until August 31. With no agreement reached between the federal government and state officials, the waiver has now been extended to September 30.
“We continue to make good progress toward finalizing the terms for an extension of uncompensated care funding under the demonstration that is consistent with the principles the CMS articulated [previously],” Eliot Fishman, director of the State Demonstrations Group at the CMS wrote in a letter.
“Uncompensated care pool funding should not pay for costs that would otherwise be covered in a Medicaid expansion,” Fishman said.
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 an obstacle to renewing waivers in other states, including California, Texas and Florida.
California, Florida, Tennessee and Texas have heavily relied on the waiver's pools of uncompensated funds.
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.
TennCare members mostly are low-income pregnant women, children and individuals who are elderly or have a disability. The program covers approximately 20% of the state's population, 50% of the state's births and 50% of the state's children.