President Joe Biden's administration says it will keep a drastic overhaul of Tennessee's Medicaid program in place while it seeks more public comment and considers what to do with the plan approved under former President Donald Trump.
In a federal court filing this week, Acting Assistant Attorney General Brian Boynton asked a judge to put a lawsuit challenging the TennCare block grant program on hold while the government reopens a 30-day public comment period. The judge signed off on the litigation pause.
The filing says the previous approval of the program under Trump remains in effect during the process. It says the federal government doesn't know yet whether it will reverse or modify the previous decision.
Tennessee is the first state approved to receive lump sum block grant funding for its Medicaid program. But the overhaul's fate remains unclear under Biden. The Democrat who has opposed Medicaid block-grant efforts can rescind the change, but has not taken any action on it to date. Democrats in the state, including U.S. Rep. Jim Cooper of Nashville, have urged Biden to scrap the block grant change.
"While the agency does not yet know whether the new decision will modify that prior approval decision, or the extent of any such modification, the agency believes that this procedure may narrow the issues in the case," the Biden administration's filing states.
In the federal lawsuit, the Tennessee Justice Center and several Medicaid recipients claim the federal government under Trump exceeded its authority in approving the proposal. The complaint also argues Trump's administration failed to provide enough time for the public to provide feedback on the plan.
"Federal officials are now willing to reconsider, and they are inviting the public to comment," said Michele Johnson, executive director of the Tennessee Justice Center. "It is rare that citizens have such an opportunity to affect government policy. That makes it really important that everyone who cares about health care in Tennessee take a few minutes to share their concerns about access to affordable care, medical debt, rural health, care for children with chronic illness or Tennesseans' other health care needs."
A TennCare official on Friday noted that the organization held its own public comment period, but also said its leaders "welcome additional input."
"We are encouraged that CMS' (the Centers for Medicare and Medicaid Services) action in no way delays or prevents implementation of TennCare III, and we remain full steam ahead," said TennCare spokesperson Connor Tapp.
Supporters had pushed for the block grant, claiming it would produce flexibility and savings inside TennCare that would then fuel additional health coverage offerings. Lee, and other supporters, said the new plan would do all of this without cutting benefits or eligibility.
Currently, the federal government pays a percentage of each state's Medicaid costs, regardless of cost increases in any given year. In Tennessee, the government pays 66%, which currently is $7.5 billion of its $12.1 billion Medicaid program.
Republicans argue the current system gives states little incentive to control expenses because no state pays more than half the total cost.
However, Democrats and health advocates have expressed concern that spending caps might cause states to purge their rolls or reduce services. They instead want to expand Medicaid eligibility, which Tennessee's Republican leaders have declined to do under former President Barack Obama's health care law.
Tennessee's General Assembly passed a resolution in 2019 calling for the submission of a block grant plan for federal consideration.
Lee declared in January that Tennessee had become the first state in the nation approved for the plan. Trump's administration signed off on the idea shortly before the president left office.
