Editor's Note: Since the October paper hit desks with initial reactions to the governor's proposed TenCare Modified Block Grant, TMA has had the opportunity to take a deeper dive into the full proposal and has released an updated statement.

The largest professional organization for doctors in Tennessee has submitted its public comments regarding the proposal to convert federal funding for TennCare to a block grant. Like many other organizations, the Tennessee Medical Association is cautious about the lack of detail in the preliminary proposal, while raising specific questions and concerns that physicians would like to see addressed in the negotiations.

TMA Statement:

Tennessee's physicians are unable to determine at this time whether the state's proposal to convert federal Medicaid funding to a block grant can realistically improve healthcare access and quality while reducing cost. There are some positives in the preliminary waiver request, but the draft raises more questions than answers about how it could affect doctors and their patients.

We cannot reduce overall funding without changing eligibility requirements or cutting benefits for our state's most vulnerable patient population. State officials should work toward a solution that provides enough funding to at least maintain current TennCare levels, or preferably cover more Tennesseans in need, and boosts physician participation by reducing administrative and clinical barriers to healthcare delivery. Hospitals won't help access for patients in rural areas of the state if there are no physicians to treat them.

TMA submitted detailed comments and questions during the public comment period. We expect the TennCare Bureau and Lee administration to be judicious in negotiations with CMS, and to engage the physicians who actually deliver care as the process moves forward.

Biggest Issues and Questions

• Shared savings - How will the state realize actual savings, and why are projections based on traditional Medicaid instead of the 25 years of actual TennCare data using the 1115 demonstration waiver?

• Episodes of care - The state proposes to continue using episodes of care payment reform efforts, but the program has serious design flaws. How can the state ask the federal government for performance-based rewards without risk for penalties when, under the current episodes program, TennCare financially penalizes doctors for costs beyond their control? The program has proven to cut costs on the backs of physicians but is not proven to increase quality or efficiency of care.

• TennCare oversight - The state wants exemption from federal mandates, but TMA is concerned that there would be no oversight if the waiver becomes permanent. TennCare should be subject to a periodic renewal process (e.g. every five years) to keep it accountable for how it utilizes resources and treats physicians.

• Drug formulary - Having a closed formulary with only one drug per therapeutic class is dangerous. There needs to be a way for patients to have access to appropriate treatment that physicians deem medically necessary, including off-label medications for children, without burdensome prior authorization. There also should be an appeals process for patients. The current EPSDT program should be preserved.

• Optimizing effectiveness and efficiency - The waiver may give the state flexibility to reduce its administrative burden, but will TennCare pass that on to physicians or use freedom from federal mandates to create new, unlimited and unchecked requirements at the state level?

• Physician fees - The draft makes no mention of physicians directly benefiting from savings, or improving administrative requirements for the providers who deliver care. We believe the state should pay its fair share for dual Medicare-Medicaid eligible enrollees. TMA agrees with penalizing enrollees for TennCare fraud, but the physicians who treat them in good faith should not have payment recouped.

• Technology to support rural health transformation - In addition to telehealth, "adopting technologies" should include funds to resolve TennCare's technological problems that create administrative and financial headaches for physicians, such as moving from paper requirements to allowing the choice to submit paper or electronic claims.