Filed by Rep. Timothy Hill, R-Blountville, on Thursday, HB1280 would direct Gov. Bill Lee to submit a waiver to the Centers for Medicare and Medicaid to establish block grant funding for the state’s Medicaid program.
“It would fundamentally change the framework of how TennCare is funded,” Hill said.
According to the language of the bill, the waiver must be submitted no later than 120 days after the bill’s passage.
Speaking to the Johnson City Press on Thursday, Hill said the funds being requested through the block grant are actually matching funds the state already pays into the federal medical assistance percentage program, also known as FMAP.
While the percentage each state pays can vary between 25 percent and 50 percent, Tennessee’s state matching requirement is roughly 35 percent.
“Federal contributions under the FMAP are unlimited, and states cover the remaining portion of their Medicaid costs,” according to a report from The Sycamore Institute explaining Tennessee’s Medicaid program.
“They do return some of that money, but it requires a state match. So the state has to put in a certain amount and then the feds come in and put in a certain amount. What we’re saying is give us control of the money that is already ours,” Hill said.
“We can spend that money more appropriately because we know our state and we know our communities.”
For the fiscal year 2015-16, the federal government paid 62 percent of TennCare’s $11 billion budget, with the state paying 31 percent or $3.41 billion in matching funds, and the remaining 7 percent coming from other revenue sources.
“Our hope is to return Tennessee taxpayer dollars back into the control of Tennessee,” Hill said.
“Washington, D.C., is very broken right now, and we are convinced and believe that Tennessee can spend those dollars better (and) in a more efficient way, cut out the cost of compliance inside of TennCare and use those dollars to serve more people in an efficient and quality way.”
Hill declined to discuss specifically how that block grant funding would be utilized, saying his bill is only a catalyst to get the process going.
“What the legislation requires is the request. So the governor would make the request, and if the answer is yes, they would go from there. There would be a tremendous amount of details that would have to be worked out,” Hill said.
Similar efforts were attempted in 2016 when former House Speaker Beth Harwell, R-Nashville, created a task force to negotiate with federal officials about block grant funding.
The difference this time around, according to Hill, is President Donald Trump.
“That’s the biggest difference, because I believe he’s discussed and mentioned more than once that block grants are possible and there is interest there,” Hill said.
“The bottom line is when it comes to TennCare, the states know best. And I think he recognizes that, and so we’re going to hopefully be able to put that request in and see where it goes.”
Lt. Gov. Randy McNally told the Tennessean on Thursday morning that he and his Republican colleagues in the Senate support Hill’s legislation, which is sponsored by Sen. Paul Bailey, R-Sparta, in the Senate, “to address the population that’s below 138 percent of the poverty level.”
Hill said House Speaker Glen Casada will support the bill.
“I think it speaks to the interest of the legislature because we want to use existing resources to take care of as many people as we can when it comes to the TennCare program,” Hill said.
Former Gov. Bill Haslam tried and failed in 2015 to receive a federal waiver to expand TennCare coverage under the Affordable Care Act using block grants, but federal regulators and most state representatives opposed the proposal.
Neither Hill’s bill, nor his statements about it, mentioned expanding TennCare coverage, but centered on changing the program’s funding mechanisms.