Stephen Smith, director of the Division of Tenncare, discussed the ways the division has changed over the years to become more cost-effective during the 2023 Tennessee State of Reform Health Policy Conference opening plenary.
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The division’s 2022 fiscal year proposed budget shows that TennCare represents 19.7 percent of the state’s overall budget. Smith said TennCare’s budget shows it impacts other areas of the state.
“TennCare does impact our state’s ability to deliver quality public education for our kids. It does impact the state’s ability to make improvements in criminal justice, public safety, infrastructure, and economic development. And TennCare does impact our state’s ability to keep taxes and debt low in the state where our citizens expect it.”— Smith
In the early 2000s, Smith said the TennCare budget was on track to get all available new state revenue dollars within just a few years, so legislators took steps to reform TennCare. He said the steps were challenging and painful, but cost-effective improvements now allow TennCare to invest in other services.
“This concept of savings and reinvestment is exactly what our latest innovation in TennCare, known as TennCare III, is all about. It actually takes that concept and it puts it into hyperdrive by rewarding Tennessee for its effective management of its Medicaid program. The reward comes in the form of what are called shared savings. That means that those savings stay here in Tennessee, rather than reverting to Washington, and then we take those savings and reinvest them back into the TennCare program.”— Smith
Smith emphasized the importance of different entities working together to continue to be able to improve the services TennCare offers.
“I recognize that my opinion and perspective is one of many, and I recognize that there are real challenges and struggles within the stakeholder groups that you all represent. We’re going to have to combine a lot of good ideas and perspectives to get this right.”— Smith